There is a copious amount of choices that have one has to make when it comes to the buying of a new home. Some like to live in metropolitan areas and some love the quietness of rural living. If you are looking forward to buying your first home and want to settle in a rural or suburban area, then the USDA Rural Development Loan might interest you.
The USDA loan is supported by the US Department of Agriculture. This loan has also been specially designed for those in the low-to-moderate income groups. Another interesting fact about the USDA loan is is that it also has a geographical barrier, which means, a person can only opt for this loan if they want to settle out of the city in a rural or suburban area. In the case that you have already started developing an interest in the USDA loan, start a search for ”USDA Loans Near Me”.
If you qualify for the USDA loan program then you might want to use the loan amount for:
● Buying a new home
● The rehabilitation of an existing home
● Renovating your home
● Relocating your residence to a qualifying location
With more people gradually taking interest in suburban living, the USDA loan has picked up great momentum. People are largely looking to settle in a rural or suburban area. Impressively, most suburban areas are somewhat equivalent to urban areas in regards to facilities, population, housings, etc. The main reasons people are looking for sub-urban or rural settlements are:
● Less crowded neighborhoods
● Availability of space
● Low-cost living
● Scope to grow
● New facilities
While the loan is backed by the US Department of Agriculture, the money does not directly come from government aid. The loan amount is paid by lenders who are USDA approved. One of the most reliable Philadelphia Mortgage Brokers is Latitude Financial, which will make your loan process simple and quick.
Qualifying for USDA Loan
Like other loans, USDA loans also follow some qualifying criteria for home buyers. “USDA Loan” may be a misnomer, as it can make the public believe that it’s a loan provided just for farms or industries. But the actual fact is that the USDA loan is only approved for almost all homeowners within the geographical limitations and requirements. Fortunately, 97% of the total US land, falls under this category.
Those who are qualifying for this loan have to fall under a special benchmark as set by USDA. Most of the criteria are categorized in terms of income, location, etc. However, a mortgage broker plays an important role in helping you to qualify for a USDA loan. A well-experienced mortgage broker can handle your paperwork as required for the loan. They will also ensure you a loan program with the best interest rates and other terms that exactly match your situation.
Here are the key factors that are required to qualify for a USDA loan.
● The location of the property must be in the rural or suburban area as marked by the USDA authorities.
● The income of the household should not go beyond the income level set by the USDA as the loan is meant to support low-to-moderate income groups.
● The borrower must use the property as a primary residence.
● The borrower must be a citizen of the USA.
● The borrower must not have been suspended from participating in the USDA programs.
● The borrower must have the legal capabilities to handle loan obligations.
● The borrower must express their interest to pay back loan installments on time.
Benefits of a USDA Loan
● Virtually No Down Payment: One of the key factors that attract home buyers towards USDA loans is the lack of a down payment. However, it is not completely free of them. The USDA demands a down payment of 1% of the total loan amount upfront. However, that can be adjusted and added to the loan amount, which means you can opt to pay nothing as a down payment.
● Low-Interest Rates: As the USDA loan has been designed for the low-to-moderate-income groups, the interest rates are not based on credit score or down payment amount. This makes the interest low, unlike other loan options.
● Fixed-Rate Terms: The USDA offers a fixed term rate of 15 or 30 years to borrowers.
● Closing Cost Assistance: The closing cost comes to around 2-5% of the total purchase price. According to USDA, the seller can pay up to a 6% closing cost. Otherwise, this cost can also be included in the mortgage loan repayment.
Limitations of USDA Loan
● Geographical restrictions: As required by the USDA, you can only buy a property that is categorized as part of a rural or suburban area.
● Income limit: The loan is designed to support families with low to moderate-income, so there is a certain cap imposed on the total family income per month.
● Single-family occupancy: The USDA loan only approves properties that will include a single family. This means that you cannot opt for a duplex or multi-family property.
If you qualify for a USDA loan, contact the experienced mortgage brokers at Latitude Financial who can help you find the best financer for your loan. You will also be rewarded with the industry’s lowest interest rates and more
550 State Road, Suite 103, Bensalem, PA 19020