Initially designed to help rural America recover from the Great Depression, today’s USDA loan program boasts some of the most attractive loan terms available for those who qualify. However, it may also be one of the most overlooked by home buyers.

The problem could be due to a lack of familiarity or the misconception that a program from the United States Department of Agriculture (USDA) is irrelevant to non-farmers. Regardless, anyone in the market for a home should investigate the possibility that a USDA loan could be the best financing option.

History

Amid the Great Depression, President Franklin D. Roosevelt searched for ways to ease the economic devastation that Americans were facing. These efforts, commonly referred to as the New Deal, included creating several new federal agencies.

In 1935, an executive order established the Resettlement Administration to help relocate struggling families to new communities. A precursor to today’s rural loan programs, the role, and name of this agency would evolve. Ultimately in 1991, the USDA launched the Single Family Guaranteed Loan Program, and Donalsonville, Georgia became the first community eligible to access the mortgages.

Eligibility

While it may seem like this program is limited to a small part of the United States, the fact is, an overwhelming majority of the country is considered rural according to the USDA guidelines. The program’s mapping system can evaluate specific addresses and provide a comprehensive picture of which areas are eligible.

Beyond the geographic requirements, a USDA loan is intended to aid lower-income buyers. Recipients are limited to a household income below 115 percent of the median income for the county they are buying within. However, the calculation does deduct the cost of childcare for your family. An interactive calculator is available on the USDA’s loan site.

Benefits

The USDA loan’s $0 down payment option is incredibly rare among lending choices. Similar to another government-backed loan, the VA loan, borrowers can qualify for a mortgage without making any down payment.

Other restrictions include a requirement to use the property as a primary residence and terms limited to a 30-year fixed rate. Applicants do, however, enjoy more forgiving credit score requirements than some other loan programs.

Discover how a USDA loan could put the opportunity to own your dream home within reach. Click over to OpenMortgage.com or call today to speak with an originator.