Are you looking to purchase a home in a rural area? A USDA loan may be your answer to becoming a homeowner. Find out if you qualify today.
Living in an area with a lot of noise, traffic, and pollution can get old fast, and these are popular reasons to consider moving to a rural area.
If this is something you long for, you might want to start the process by evaluating your loan options. In this specific case, one choice you have is a USDA loan.
A USDA loan is a great option when moving to a rural area, but will you qualify for one?
Learn about the eligibility guidelines for these types of mortgages in order to see if you might qualify.
The Primary Benefits of USDA Loans
The US Department of Agriculture is the organization that created these loans and backs them. People who qualify for these like them because they offer the following benefits:
- No down payment required
- Low interest rate
- Lower income requirements
People who may not meet the guidelines for other mortgage programs may meet the conditions for USDA loans.
1. US Citizens only
You can only get a USDA mortgage if you are a citizen of this country. If you are not, you cannot apply for one.
2. Proof of Income and Job Stability required
Most lenders that offer these loans require proof of income and job stability for at least two years. If you switched jobs recently, you might want to wait to apply for one.
3. Subject to Income Maximums
A USDA loan is available depending on your income – your income must fall below a specific threshold, which varies by area, in order to qualify.
If you qualify, the payment amount for your loan must be less than 29% of your income. This percentage includes the monthly mortgage payment, taxes, and interest. This amount limits the amount you can spend on the house you buy.
4. Acceptable Credit History
USDA loans are available to people with less than perfect credit, but there are still guidelines with credit requirements. Your credit must be in a range that is acceptable to the lender and must be free of derogatory details for the past year.
Credit is a vital aspect of who you are, and it affects many things in life, including eligibility for mortgages.
5. House Must Possess Specific Qualities
Finally, there are qualities that a house must possess for you to buy it with a USDA loan. These qualities include factors about its location, price, and condition.
6. Down Payment Recommended
It's possible to get a USDA loan with no money down. However, it's often a better idea to put some money down when buying a house. You may want to spend some time saving up to prepare for this event.
If you meet these guidelines, you are probably eligible for one. You'll need to apply with a lender to find out for sure, though.
Learn More About Mortgage Programs
A USDA loan is one of many mortgage types that you can choose from. If you believe you meet the eligibility criteria, talk to a lender to find out what you should do next.
If you would like more information about these loans or other types, check out the rest of our site for articles relating to mortgages, finances, and other financial matters.