Planning to buy a property you can call home? Know about USDA Home Loan programs

It is an easy as well as accessible approach for the rural and suburban homebuyers. This program makes it easy for people to finally have a house they can call ‘Home’. And, majority of people don’t know how the USDA Home Loan Qualifications work and how accessible it is.

USDA Loan which basically stands for United States Department of Agriculture Home Loan is a program initiated by the United States Department of Agriculture for the people of Rural and Suburban areas who are eligible to be homebuyers. The program is a mortgage loan program with zero down payment facility as a part of Rural Development program. The motive behind this is to help families buy homes and upgrade their old properties. Also, the interest rate on this loan program is very low so that people can afford paying it. The purpose of USDA Home Loan is to improve the quality of life and economy of the rural America.
How does USDA Home Loan program work?

The program runs through a process as described below-

Apply: First of all, you need to find a lender who knows about the home loan program and is a verified lender to access such information. Also, the lender must be offering USDA financing as most lenders of the US approve USDA Home Loans. So, find the one that suits you best and apply for the loan.
Pre-approval: After your lender access your credit, employment and income related information then they check whether you have met the USDA Home Loan Qualifications or not. Once you are eligible for the loan you will get a pre-approval letter.
The property search: Now that you have received your pre-approval letter, then the next step is to find a house that is USDA eligible which is falls within the designated area and fulfils the other criteria. Once you find the appropriate house, you can then make an offer.
Lender’s Approval: Making an offer means adding property information to your loan file, later which your lender needs to make a final check through the file. The final check is called as the lender’s approval.
USDA approval: After the lender’s approval, the lender submits your loan file to USDA for its approval. And the USDA checks for the necessary information and approves the file by final signoff.
Closure: Last but not the least is when you sign the paperwork and after few days you finally own a home. Now, you can enjoy staying in your home after the mortgage process is complete.
USDA Home Loan Qualifications: What are the necessary requirements or eligibility criteria?

While the income limit varies from location to location as well as on the size of the property, but here are general eligibility requirements that one must follow-

One must hold a U.S. citizenship or permanent residency in the U.S.
A monthly payment of 29% or less than your monthly income must be made, and it includes principal, interest, insurance and taxes. Also, there must not be any other debts payment exceeding 41% of your income.
A credit score of 680 and above is preferred if you want higher debt ratios to be considered.
The property should be purchased in a rural area only.

Why should you consider getting a rural housing loan?

Do you have a plan of settling down later in life far away from the crowd and traffic? Then the USDA Rural Housing Loan is the right solution for you. The Department of Agriculture in the United States has been issuing easily available rural home loans to people who would like to have a home in such areas. If a candidate fulfils the USDA loan requirements, those eligible candidates can easily get a zero-down payment mortgage for rural and suburban areas. Improving rural life and economy The Rural Development program under USDA has been helping a lot of families to buy new homes or upgrade existing ones to improve the quality of life in the rural parts of America. Instead of overpopulating the already crowded cities, this move will help willing families to shift to greener and less populated areas to have an even distribution. USDA Rural Housing Loan offers very low interest rates and zero down payment facilities to make it even more accessible to a lot of people. If the word home loan seems a nightmare to you because of the hassle usually associated with getting loans approved and then paying the exorbitant interest rates, this should sound like a dream. There are no hidden costs involved and people can get instant loan help at absolutely no down payment if they fulfil the USDA loan requirements. USDA offers home ownership as well as home repair and renovation loans to Americans. It also provides financial help to elderly and low-income families in rural multi housing units. The variety of assistance provided by USDA give you enough reasons to consider applying for USDA Rural Housing Loan. Variety of assistance programs Qualifying for USDA home loan program has nothing to do with your profession just because it is meant for rural America. It simply depends on your income and the location you are choosing for housing. USDA has more than 50 financial assistance programs to uplift the economy and lifestyle of rural America. There are programs for businesses, communities and also for individuals. It works in collaboration with lenders to guarantee easy loans to create opportunities to create multi-family housing units in rural areas. There are loan guarantees and grants for community improvement facilities focussing on health care, education and safety. For instance, many hospitals and community centres have come up with assistance from USDA. The rural housing plan of USDA comes under the financial assistance program for the individuals and improvement of their lives. The plan consists of programs like: -

Prepare a Budget and then own a Home: USDA makes it as easy as it sounds.

Then it’s high time you introduce yourself to USDA Mortgage, a lesser known loan service for the greater good of the Rural population. And, guess what you can ascertain your budget too by simply using the USDA Loan Calculator.

What is USDA Mortgage?

The Mortgages that are guaranteed by the U.S. Department of Agriculture (USDA) are called the USDA Mortgages. There are one of the fewer loans that are still available at no down payment applicable on home purchases. For every rural area that comes under the eligible areas, USDA Mortgage is the best option available for them to buy houses of their own. They have certain limits as far as the income is concerned and eligibility criteria for the rural residents to qualify.
USDA Mortgage Eligibility

USDA Loan Credit Requirements: A person who wants to get USDA loan should show a stable income, a good credit history and ability to repay the loan. Even though there is no minimum credit requirement but a credit score of 640 or above are granted the loan without any doubt. The lender needs to check your credit score, patterns of loan repayment, credit utilization and length of credit history before they apply for a USDA loan.
USDA Loan Income Requirements: Someone who has a stable income is preferred for USDA Mortgage. A lender checks for two years of consistent employment along with income tax returns for verification purpose.
Location Requirements: To know whether your area is eligible for a USDA Home loan, you must check the eligibility map. And, the best part would be if you ask your lender to check whether your preferred location is eligible or not. This loan has been introduced to help rural areas through development so any other area that doesn’t fall under the Rural category is not eligible for the loan. There are some Suburban areas that qualify though. Also, there are population factors to determine the same.
Property Requirements: The purpose of the USDA Mortgage is to provide people having low and moderate income with a safe and sanitary household. So, the basic requirements that you must include are, the house must be the buyer’s primary residence; the house must be having adequate facilities and access to transport, road, water as well as water disposal system.
Citizenship: It is one of the primary needs as the residents of the rural areas must be permanent U.S. citizens.
Employment: A person must have at least 2 years of continuous employment or stable work to qualify himself/herself for USDA Mortgage.
What is a USDA Loan Calculator?

A USDA Loan Calculator is basically a payment calculator used by the USDA to calculate an accurate USDA Mortgage. It is done by accounting monthly USDA Mortgage insurance, homeowner’s insurance, USDA guarantee fee and property taxes. It helps people ascertain their monthly payments that they have to make against the loan they are planning to take. With the help of this, people can draw a budget and then search for a property or home that fits their budget.