USDA Loans – 100% Financing, Zero Down, Credit Score 600+ for Home Loan
In 1991, rural development loans were started by the United States Department of Agriculture (USDA) to encourage people to buy homes in the suburban or rural areas of the country. USDA loans program was started with the vision to boost the economy and progress of the rural areas.
This loan program is among the few programs present in the housing market that provides buyers with 100% financing, which makes it one of the most affordable home financing options. In fact, this is the only program that provides zero money down loans to individuals who have not served in the military. USDA loans also provide you with lenient eligibility requirements and low rates of interest. To qualify for these loans, it is imperative for your house to be situated in a USDA designated rural area. Plus, your yearly income should be within the standards set by the USDA and you should have a decent credit history. The USDA offers several types of loan programs that are listed below.
Single Family Direct Homeownership Loan using USDA Loan
This loan is offered to people with low income to help them buy a home or to renovate and repair their home. But there are some specifications that you need to remember. For instance, if your income is above the Area’s Median Income (AMI) by 60% then you will get a loan for 33 years, otherwise you will get a loan for 38 years. But if you are buying a mobile home, also known as a manufactured house, then your loan tenure will be 30 years.
However, to be eligible for this loan, your yearly household income must be less than 80% of the AMI. Plus, you should not have adequate housing; the house that you want to buy should be modest; you should be able to pay off your monthly mortgage instalments; and you should be unable to get a loan through another lender.
Single Family Guaranteed Housing Loan using USDA Loan
People having moderate income can apply for the USDA Rural Development Guaranteed Housing Loan to buy a modest house for themselves. You can get this loan for a period of 30 years and the rate of interest is low and fixed for the whole period. To be eligible for this loan, your yearly household income should not be more than 115% of the AMI. It is also essential for you to have a decent credit history and to be able to afford the insurance, taxes, and monthly mortgage payments of the property.
Rural Repair and Rehabilitation Loans and Grants using USDA Loan
Grants and loans are provided to people having low income so that they can improve their house by performing repairs and renovations. These funds are provided so that you can make your house more sanitary or safer by removing any health or safety hazards. To qualify for this loan, your income must be below the AMI by 50% and you should not be able to get affordable credit from somewhere else. You can get a maximum loan of $20,000 for 20 years.
If you are aged 62 or above and will not be able to repay a loan, then you are eligible to get a grant. You can get a maximum grant of $7,500.
Mutual Self Help Loans
This loan is provided to people having low income, so that they buy a safe and clean house for their family. But in this loan, the family will have to do the maximum labor to build their house. Your yearly income should be 80% below the AMI to be eligible for this loan. This loan is provided for up to 30 years and the interest can be as low as 1%.
You can choose the program that will suit your requirements and apply for that particular loan. If you are confused as to which USDA loan program will suit you the best, consult our loan expert. You can call us or email as and we’ll get in touch with you!