Since 1991, the US Department of Agriculture home loan is helping rural Americans to relish their dream to have personal homes. Not only this, USDA grant home loan for the purpose of renovation and repair of existing old home. If you are in the countryside, and looking for owning single or multifamily home or you need money for repairing your old home, then here is everything that you need to know about the USDA home loan program
Zero Down Payment – Keystone of USDA Home Loans
The keystone of a USDA home loan program is to unburden people from heavy down payments. This home loan program is designed specifically for the borrowers with low or medium income group, who are incapable of making heavy prepayments. The main motive behind this loan program, is to ensure everyone belonging from low to lower income group that they can have their home loan.
For applying for USDA home loans, a borrower need to visit any bank that specializes in USDA loan programs. The USDA specialized bank, from beginning to the end assist the borrowers about all the paperwork, and also inform borrower about their eligibility and qualification for the USDA home loans. After the completion of all the basic requirements, bank and USDA work together to make you able to take advantage of USDA home loan programs.
After approval of loan, the borrower receives 100 percent mortgage money. As compared to other mortgage loan programs, the rate of interest applicable on this loan is very competitive and less.
USDA Home Loans Vs Traditional Mortgage Loans: Contrasting Points
When it comes to home loans in rural areas, other than zero down payment there are following reason due to which USDA home loans have an edge over other traditional mortgage loans:
- Under the USDA home loan program, the borrower can borrow 100 percent of property value, however In case of traditional mortgage loans borrower can get around 96 percent of property value.
- If the borrower applies for a USDA home loan, then he does not need to have a good or perfect credit score. Though, for traditional mortgage loans, the borrower need to have a credit score above 540.
For people with low to moderate income, USDA home loan is the apt way to buy their own home. Though , there are certain criteria that decides borrower’s eligibility for getting USDA home loans.
Eligibility for USDA Home Loan
If a borrower is from Wall Street or Manhattan, better they forget about USDA home loans. The USDA home loan is specifically designed to assist rural areas, and not the cities. As discussed before, this home loan is for low to middle class income group. Factors other than borrower’s geographical location and his income, there are some other parameters also that decides the eligibility for USDA home loans, these parameters are:
- Have potential to personally occupy the dwelling.
- Be a citizen of the US or a qualified permanent resident.
- Non-occupant and co-borrowers are not allowed.
- Borrowers must sell their current home.
Conclusion
After the promulgation of USDA home loans, having a personal home is not a distant dream. The fact of the matter is – USDA home loans have the capability to change the destiny of rural areas. If you are in countryside of Texas and have a desire to own your home, then contact your local banks specialized with USDA loans in Alba,Amherst , etc. For more information, contact our banking experts.