Not everyone craves the energy of city living (and sometimes the hassles that can arise from it). Luckily, mortgages aren’t one-size-fits-all. There’s even a specific loan to help encourage home ownership outside the most densely populated areas of the United States.
Want to know more about the USDA loan program? Look no further.
What is a USDA loan?
This is a home loan offered by the United States Department of Agriculture, designed to stimulate growth in less populated areas. It requires no money down (to your local lender), which makes it appealing and more affordable to buy a house, especially for first-time home buyers.
Are YOU Eligible?
The basic categories the lender will look at include credit, income, usage of the property and location.

• Credit: A credit score of 640 or better allows the homeowner to receive an automated underwriting process. A score under 640 doesn’t necessarily disqualify a person, but they will have to undergo manual underwriting. Those with no credit are not automatically excluded, and could still obtain a USDA loan under certain circumstances.

• Income: A current and stable income stream will have to be verified. Because USDA loans are for those with low to moderate incomes, there IS an upper limit to what one can earn and still qualify. These limits are different for each location and size of the family.

• Property Usage: The property must be the primary residence of the homeowners (not a second home or vacation home).

• Location: The property needs to be in a rural area. We discuss this more below.

 
Is Your Potential Property Eligible?
About 97% of all the land in the U.S. qualifies for a USDA loan. But if you want to live in a city, you most likely won’t be able to use this particular loan. Generally, towns with less than 20,000 people qualify, though there are exceptions for larger towns in certain areas. You can use the interactive map on the USDA website to see which areas are approved.
Remember that these are general guidelines, and each property and person are unique.
If you think a USDA loan might be right for you, connect with one of our loan originators for more information.