If you think there’s no way you can afford to own your own home, the USDA wants you to think again.
Wait, the US Department of Agriculture? The same people who look after farming and food safety? That’s right. For more than 60 years, the USDA’s Rural Development Guaranteed Housing Loan Program has been helping Americans buy homes. But is a USDA home loan the right fit for your situation?
City House, Country House
A big focus of this program’s mission is rural development, so you’ll have to look at other options if you want to live in a major city. But once you’re outside of metropolitan areas, almost all properties are eligible for USDA loans. This map provides a quick and easy key to where you can buy.
Many potential home buyers find it hard to save up for a large down payment. That’s the best part of a USDA loan: no down payment necessary. Closing costs can even be folded into the loan or paid by the seller. USDA loans also offer some of the lowest interest rates you can find, thanks to a government-backed guarantee.
To get all the benefits of a USDA home loan, you have to meet a few basic requirements:
- Your total household income can’t be above a certain limit — usually around 15% more than the average in your area.
- Your monthly payment for the home can’t be more than 29% of your income. And your total debts shouldn’t be more than 41% of your income
- You must have a steady income for the last two years
- You must have a reasonable credit history, including a good track record of paying your debts. A credit score of at least 640 is preferred, but not required
- You must be a U.S. citizen or permanent resident.
How USDA Home Loans Work
To get a USDA home loan, you don’t have to worry about going through government red tape. All you have to do is contact a participating mortgage lender, and they’ll handle everything. The process is the same as with any regular mortgage, where you submit your financial information to the lender and they decide whether to approve your application. You can then shop around for a home in your pre-approved price range. All that’s left is getting the USDA’s final sign-off on the loan. The whole operation, from start to finish, can take place in less than two months.
The home of your dreams may be within your reach. At Equity Bank, we finance USDA and other government home loans to help you become a homeowner. Finding a great home in a great community is just a call away. Get in touch with us today, and we’ll work with you to find the right loan terms for you!