The USDA Rural Development Guaranteed Housing Loan program offers loans to eligible consumers living in designated rural areas for little to no down payment with 100% financing, and often at interest rates that may be better than what is available at conventional mortgage lenders. Both first-time and repeat home buyers can take advantage of these loans, which are insured by the United States Department of Agriculture.
Like more conventional loans, you would have a typical payment schedule, closing costs will be in a standard price range, and you would not be subject to prepayment penalties.
However, one big difference between a USDA loan and a conventional one is that both your income and the location of the property must meet the USDA property eligibility and income eligibility requirements. With your input, the USDA web site will determine, based on your income and county, if you meet the income threshold.
In regards to location of the property, on February 2 2015, the United States Department of Agriculture (USDA) updated their maps that indicate which areas are considered a rural area. These homes in a designated rural area may be eligible for loans with 100% financing, and may allow for closing costs to be financed into the loan as well.
How do you know if your potential home is located in the new or previous rural area map? The new changes to USDA property eligibility are already available on the USDA website. Click here to enter your property address into the search to find out if your property is eligible for a rural home area.
Completed home loan applications submitted on or after February 2, 2015 are subject to the future eligibility map, while home applications submitted before February 2, 2015 are eligible under the previous eligibility map. Keep in mind that not all mortgage lenders offer USDA loans.
If you are unsure of your application is subject to the previous or updated rural map, please contact us at Shamrock or ask your mortgage professional for any clarification you need. We can help you find the best program that addresses your particular situation. Home ownership doesn’t have to remain a dream – it can be yours!
Learn more about the USDA Loan Program by downloading our Free USDA Loan Fact Sheet now.