Here, we’ll take a look at some of the key facts surrounding USDA loans, so you can see if you qualify and get a better idea of what you’re signing up for.
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What Is a USDA Home Loan?
A USDA loan is a loan that is granted by the United States Department of Agriculture (USDA). Whether you’re looking for a new home or are in need of a way to upgrade (or repair) the home you already have, a USDA loan is one way the federal government provides aid to those in rural areas. Each year, the government provides aid to tens of thousands of families in lower-income areas in the form of USDA loans.
In general, these loans require zero down payment and have very low interest rates, so if you qualify, they can go a long way toward helping you realize your dreams of homeownership.
Beyond the general criteria listed above, USDA loans exist in different forms– specifically in three different loan programs:
- Loan guarantees. If you’re applying for a more traditional mortgage but qualify for a USDA loan and want to take advantage of the low rates and zero down payment, the government may guarantee your loan with a conventional lender. It is important to note that in these situations, you will be required to pay a mortgage insurance premium on top of your monthly payment.
- Direct loan. These are loans issued directly from the government, where you can enjoy interest rates as low as 1% after subsidies.
- Home improvement loans or grants. If you’re already a homeowner but want or need money for upkeep, the USDA may issue qualifying borrowers a loan or financial award up to $27,500.
Another detail to keep in mind is that USDA loans are for houses valued under the area home limit. Depending on what part of the country you’re in, this could mean a loan amount of anywhere from $100,000 to $500,000 (or even higher in certain areas, like California).
And before you assume that you don’t qualify for this type of loan because of the name: no, you do not need to be in an agricultural profession to receive a USDA loan! So long as you live in a rural area (and in some cases, even a suburban one), you may be eligible if you meet the conditions below.
Benefits of Choosing The Home Loan Expert for Your USDA Loan
When you finance your USDA loan through The Home Loan Expert, you’ll benefit from:
- Zero down payments
- Very low, fixed rates
- Ability to qualify with credit scores as low as 620
- Availability for both first-time and repeat homebuyers for purchases or refinances
- Eligibility for single-family homes, condos, and manufactured homes
How Can the Home Loan Expert Help?
If you think you may be eligible for a USDA loan or a USDA refinance but aren’t sure how to go about getting approved, we are more than happy to lend a hand. The Home Loan Expert team is here to provide mortgage help quickly; whether you want to purchase a home or refinance your existing mortgage, our 5-Minute Loan Approval*will get the process started in no time!
If you’re unsure of whether or not you may qualify for a USDA loan, our Experts are happy to walk you through your qualifications and all of your potential mortgage options. So give us a call or take advantage of the Live Chat option today!
Learn About Other Loan Types
Adjustable Rate Mortgage
When you’re shopping for a new home, one of your most important decisions will be what kind of mortgage to take out to finance your home. Your mortgage type will be the top factor that influences how much you can borrow(and thus what kind and size of home you purchase), as well as your monthly budget moving forward. For a variety of reasons, an adjustable-rate mortgage (ARM) can be an appealing choice in the short term, but it can seem scary as well. However, it’s important to understand how ARMs work, since this type of loan has repayment terms that may become less desirable over time.
The home buying process can be overwhelming and stressful, especially if you’re buying your first home (or if your financial circumstances make it more difficult to get an affordable loan). For many home buyers, getting a loan insured by the Federal Housing Administration (FHA) can be extremely helpful in not only securing the necessary financing to buy but also achieving the dream of owning a home (even while facing tough financial situations). FHA loans allow lenders to make home buyers better deals, resulting in lower down payments, lower closing costs, and easier credit qualifying. Here, we’ll go over the ins and outs of FHA loans, including what they are, who qualifies, and what the process of securing one looks like.
Fixed-rate mortgages—also called “conventional mortgages”—are basically the bread and butter of the mortgage industry. And that’s because this loan type is still the most reliable way to finance your home, offering affordability, flexibility, and so much more. As their name suggests, fixed rate loans have the same rate throughout the entire term of the loan. So even if interest rates rise while you’re paying off your loan, your rate and payment amount are locked in for the entire loan term. That’s why fixed-rate mortgages are so popular–they offer protections that ARMs can’t.