What is a USDA Loan?
A USDA Loan is a zero-down mortgage for low-to-moderate income families living in rural and suburban areas. It is backed by the United States Department of Agriculture and is designed to promote homeownership in areas that are economically challenged.
Who qualifies for a USDA Loan?
To qualify for a USDA Loan, you must meet income eligibility, be a U.S. citizen or qualified non-citizen, plan to occupy the home as your primary residence, have a dependable income, and purchase a property in a USDA-eligible area.
Are USDA Loans only for first-time homebuyers?
No, USDA Loans are not exclusively for first-time homebuyers. However, if you currently own a home, you must be unable to obtain affordable credit elsewhere and have an income that is at or below the low-income limit for the area where you live.
How can I find out if a property is eligible for a USDA Loan?
You can visit the USDA’s website and use their online tool to check the eligibility of a specific property. Remember, a property must be located in a USDA-designated rural or suburban area to qualify.
Can I use a USDA Loan to buy a mobile home?
Yes, USDA Loans can be used to buy new manufactured homes as well as certain types of existing manufactured homes. However, the home must meet specific USDA Manufactured Home Requirements.
Can I get a USDA Loan with bad credit?
The USDA does not set a minimum credit score requirement, but many lenders require a score of at least 640. If your score is lower, some lenders may still work with you if you have a steady income and a good payment history.
What are the interest rates for USDA Loans?
Interest rates for USDA Loans are typically at or below market rates. Exact rates can vary based on your credit score, down payment, and the lender you choose.