There are many different loan options available for all types of home buyers, from first timers to those who are purchasing a second home. One option that often goes unnoticed is the USDA loan. This is a great government program meant for low income, rural residents that can and should be taken advantage of more often. Let’s take a look at USDA loans in more detail to determine if you can qualify.
What is a USDA loan?
In 2014, as part of its Rural Development program, the USDA (United States Department of Agriculture) invested just about $20 billion to help rural families purchase and improve their homes. The program was created and designed to help rural areas improve their economy and quality of life.
There are actually 3 types of USDA loan programs:
There are several criteria that you need to meet in order to qualify for a USDA loan. Your loan advisor can assist you in determining full eligibility. Here are a just few:
Check the USDA eligibility map
What can a USDA loan be used for?
You can use the USDA loan for the purchase of a home in a qualifying area. You can also use funds to build, make repairs, renovate or even relocate a home. The loan can also be used to provide water and sewage facilities.
How much is the down payment and what is the interest rate?
Typically there is no down payment required. If you have assets exceeding the low income limit, then it may be necessary for you to make a small down payment.
The interest rates are fixed and are based on the current market rate at the time of the loan processing. The rate could be as low as 1%. Typically the loan term is 33 years but you may be eligible for a 38 year term.
The best way to determine if you qualify and how much of a loan or grant you may be eligible for is to talk to an approved mortgage company. When you meet with a professional, he or she will know all of the criteria, rules and steps associated with USDA loans. Call Florida Real Estate Lending today to schedule a free consultation and you will be on your way to home ownership!