USDA Loans

A USDA Loan is a Government Guaranteed loan through the United States Department of Agriculture Rural Development Program (USDA RDP).

The way it works is quite simple. The arm of the government, the USDA has a vested interested in growing rural communities across the country.  In order for an area to flourish it will generally start with housing. Over the last fifty years rural areas have seen a decline in their economic growth rate. In order to combat this the government has rolled out this program for rural areas. The idea is, if you buy a home in any of the approved rural areas we will allow you to get a loan with no down payment. We will guarantee the mortgage so you get flexible and easy approval requirements and still get access to very low fixed interest rates.

So you can see the purpose of the USDA loan is to help all parties involved. Currently the loan program does have limited funding. Every year congress sets aside a specified amount of funds for the program. Its very important to apply and buy a home early before the program runs out of funds. Sometimes people may have to wait for funding if they procrastinate. Hopefully in the future the program will open up to have unlimited funding.

With the USDA offering 100% financing more families can own a home, more builders will develop in that community which will induce additional commercial investment that will allow the area to flourish and create job growth.

USDA Loans At a Glance:

  • USDA loans are ideal for rural or semi-rural areas
  • Guarantee Fee applies: may be financed and added to the loan amount
  • 100% financing. No down payment
  • Flexible credit guidelines and 640 Credit Score
  • Can use rental history in lieu of credit
  • Can get cash back for repairs or improvements
  • Income cap per the county
  • No purchase price limit
  • Qualifying ratios are 29% for housing costs and 41% for total debt. Lenders may request an exception to exceed these ratios when strong compensating factors are identified
  • Closing costs may be paid by seller, financed (if eligible), paid by lender credit, or paid by borrower
  • Small PMI payment
 
USDA Property Eligibility:

You might be surprised to find what properties are located in a USDA tract!
To find a qualified property and access the USDA website click the following link:

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
 


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