Did you ever dream of simply leaving the city and going to live in the countryside? Is the rural landscape a lot more appealing to you than pavements and concrete buildings? Then a USDA loan might be the solution to your every question. Because thanks to the US Department of Agriculture mortgage and loan program, you can now buy a home in the countryside which might have seemed out of your reach before. Here’s everything you need to know about the loan itself and to get it.
Designed to “improve the economy and quality of life in rural America”, the Rural Development program or USDA RD, aims to help families that wish to relocate from urban areas to rural ones. It does this by offering appealing loans with very low-interest rates and no down payments. Apart from that, loaners are always surprised to find out how accessible such a loan really is. In 2014 alone, the USDA invested some $20 billion and helped approximately 140 000 families buy and improve their rural houses.
But how do you know if the USDA loan is right for you? Moreover, how do you know if you’re qualified to get it? Read on, as we have all the answers on this matter.
In case you were asked to ‘define rural devlopment loan,’ the first thing you need to know is that there are three types of USDA home loan programs. Knowing this crucial piece of information right from the start will make it a lot easier for you to choose and apply to the correct program for you.
Now that you can answer the question ‘what is a rural development loan’, it’s time you started learning about the requirements. When you start analyzing your prospects and your chances of qualifying for a USDA loan, the first thing you need to look at is your income limit. It depends on the geographical area you live in and on your household size.
Apart from this preliminary information, you also need to check out on the following requirements.
Depending on your credit score, you may have to apply to the following standards:
As mentioned above, a loan issued or backed by the USDA is essentially a mortgage. It will help prospective home buyers that have proved they have the greatest need. This means the following.
The USDA, when not working via lenders, can issue loans itself. They will regard homes that are 1 800 square feet or less and that have a market value below that particular area’s loan limit. That limit varies depending on where you live. Home loans themselves can go as high as $500 000 and even more, should you live in California or Hawaii, for example. These areas are known to be very pricey when it comes to real estates. But loans can go as low as $100 000, too, should you live in rural America. However, just for you to have a general idea of the loan, the USDA usually issues average loans of $216,840.
It’s also good to know that all metropolitan areas are excluded from this program, but you can find some suburb location the USDA might approve of, so don’t be afraid to ask. All rural areas are eligible, no matter which part of the country they are situated in.
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