USDA Loans. For everyone?
Is the American dream of homeownership still in your dreams? Thanks to USDA loans, more and more Americans are becoming homeowners, and you can become one of them. With huge benefits and easy qualification measures, if you’re looking to buy a home in a rural area, a USDA loan could be the perfect finance option for you.
When financing a home, one of the biggest hurdles is often coming up with enough cash to make a down payment on your loan. But with a USDA loan, you don’t have to worry about this. USDA loans are the only non-military loans that offer $0 down payment even with 100% financing, so you don’t have to wait to start looking for a home.
In addition to no down payments, USDA loans save you money in other ways as well. While conventional loans require PMI (Private Mortgage Insurance) that can cost a few hundred dollars every month, USDA loans do not. USDA loans also have lower interest rates than conventional loans, as well as lower closing costs that you can include in your loan amount. As 30-year fixed-rate mortgages, they’re easy to manage as well.
To qualify for a USDA loan, you don’t have to worry too much about your credit history. Even if you’ve had some credit trouble in the past, as long as you’ve recovered you’ll probably be okay. The main thing to keep an eye on is the population of where you’re looking to buy your home; because USDA loans are meant for rural areas, population must be under 10,000 (although sometimes this limit is raised to 25,000 if you’re in a town or small city). There are income limits as well, but they vary depending on where you are in the country.
A USDA loan may your golden ticket to finally owning your own home. With no down payments and plenty of money-saving benefits, there’s no reason not to look and see if they’re an option for you. Thanks to a government-backed mortgage program specifically for service members, eligible veterans can breathe easy and buy a new home with less hassle.
Hey Engineer Your Finances!
It’s Amanda from the Yakezie. My first job’s salary out of college was paid for by a USDA loan, so I thought I’d check out your article. I had no idea these loans were used to homes in rural areas as well! Thanks for sharing.
@ Amanda
Good news that we have someone who used the loan for your salary. Would you mind expanding on this? It looks like a few of the other commentators had questions about this aspect. Thanks for stopping by!
*Sorry for the delayed reply, see my post tomorrow morning explaining where I went
USDA loans can pay for salaries and homes? That seems a little odd to me…
@ Jenna:
Unfortunately this was a guest post. I read through it, but didn’t get to verify all the statements. This came up in some other comments, so I’ll start looking into it.
*Sorry for the delayed reply, see my post tomorrow morning explaining where I went
I can’t believe that even after the housing bubble burst, there are still home loans with 0 money down. When are we going to wake up from the fact that not everyone should be living in a home??
@ Rebates Money:
Not sure, but I’m with you. When you look at the historical data collected, the trend towards home ownership started turning after WWII and was really advocated during the Reagan administration (I believe). The center can’t swing to far from 50% because it wouldn’t make sense otherwise. You can’t have everyone living in a house, but you can’t have everyone renting either.
*Sorry for the delayed reply, see my post tomorrow morning explaining where I went
It does seem a little odd that USDA loans can be used to pay salaries and to finance your home. In any case, a good rule of thumb to stick by when deciding whether to buy a home or rent one is the five year factor. If you don’t see yourself living in the home for five years, you are probably better off renting.
@ Moneyedup:
See earlier comment response. I’ll have to start looking into this to substantiate the claim. As of right now, I don’t know. I asked the author to provide some commentary, but haven’t heard back yet.
5 year factor has been a standard baseline, but I think given all the recent changes the assumptions under that statement may be slightly outdated.
*Sorry for the delayed reply, see my post tomorrow morning explaining where I went