USDA Loans
What are USDA Loans?
USDA loans are government-backed mortgage loans provided by the U.S. Department of Agriculture (USDA) that help eligible low-to-moderate-income borrowers purchase homes in rural and suburban areas. These loans typically offer low interest rates, no down payment, and are designed to promote homeownership in areas that the USDA classifies as rural. USDA loans are a great option for buyers who may not qualify for conventional loans but still want to achieve homeownership.
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Are USDA Loans Right for You?
USDA loans are designed for low-to-moderate income borrowers looking to purchase homes in eligible rural or suburban areas. These loans are ideal for first-time homebuyers or those who may not have a significant down payment saved. If you’re seeking affordable financing in a USDA-approved area, this loan could be a perfect fit for you.
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Eligibility Requirements
To qualify for a USDA loan, you must meet the following criteria:
Location
The property must be located in an eligible rural or suburban area as defined by the USDA.
Income Limitations
Your household income must fall within the USDA’s income limits for your area, which vary by region and household size.
Debt-to-Income Ratio
A typical maximum debt-to-income ratio of 41%, though higher ratios may be considered with compensating factors.
Credit Score
While the USDA does not have a minimum credit score requirement, most lenders prefer a score of at least 640.
Primary Residence
The home must be used as your primary residence.
USDA Loans
Numbers at a Glance
Here’s a quick overview of key numbers associated with this type of loans
Minimum Credit Score
640
Varies by lender
Down Payment
0%
Varies by loan type
Maximum DTI Ratio
41%
Varies by lender
Loan Term
30
Years to payoff the loan
Upfront Mortgage Insurance Premium (UFMIP)
1%
Of the loan amount
Annual Mortgage Insurance Premium (MIP)
0.35%
Of the loan amount, paid monthly
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We offer a variety of loan programs designed to meet the needs of every homebuyer.
USDA Home Loan is perfect for you?
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Benefits of USDA Loans
1.
No Down Payment
USDA loans do not require a down payment, making it easier for eligible buyers to purchase a home without needing to save for a large upfront payment.
2.
Low Interest Rates
USDA loans offer competitive interest rates that can make monthly mortgage payments more affordable over the life of the loan.
3.
Low Monthly Mortgage Insurance
The annual mortgage insurance premium for USDA loans is typically lower than other loan types, helping to keep your monthly payments manageable.
4.
Accessible for Lower-Income Borrowers
USDA loans are specifically designed for low-to-moderate income borrowers, providing a path to homeownership that may not be available through conventional financing.
Not the Loan You’re Looking for?
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Non-QM Loans
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You can always ask for advice from a mortgage loan expert.
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USDA Loans FAQ’s
Can I use a USDA loan for a property that isn’t in a rural area?
USDA loans are limited to properties located in eligible rural or suburban areas. You can check the USDA’s property eligibility map to see if your desired home qualifies.
Do USDA loans require a down payment?
No, USDA loans do not require a down payment, allowing eligible buyers to finance 100% of the home’s purchase price.
What are the income limits for USDA loans?
Income limits vary by location and household size. The USDA sets these limits based on the median income of the area, and you can check the USDA’s website or consult with a lender to determine if your household income qualifies.
USDA loans are limited to properties located in eligible rural or suburban areas. You can check the USDA’s property eligibility map to see if your desired home qualifies.No, USDA loans do not require a down payment, allowing eligible buyers to finance 100% of the home’s purchase price.Income limits vary by location and household size. The USDA sets these limits based on the median income of the area, and you can check the USDA’s website or consult with a lender to determine if your household income qualifies.
Find Your Perfect USDA Loan
First Finance Lending will guide you with expert advice and personalized service to start your homeownership journey with the perfect loan program.
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