USDA 101

USDA is a loan program that serves a fraction of the U.S. housing market and most banks don’t offer this program. However, many rural and suburban home buyers can use this program. The full name of the program is USDA Rural Development Guaranteed Housing Program. It is known to most as “USDA loans” or “Section 502”. If your lender does not offer USDA mortgages, the U.S. Department of Agriculture’s website can be accessed to obtain a list of lenders in the Rural Housing Program. The USDA loan program currently offers a 30 year fixed rate mortgage only. Beginning September of this year a 15 year fixed rate mortgage will be available however there are no adjustable rate mortgages.


There is no maximum loan size for the USDA Program. The amount that you can borrow is limited by your household’s debt-to-income. USDA typically limits to 41% except when the buyer has a credit score over 660, a stable income, or shows a demonstrated ability to save.  USDA loans are insured by the U.S. Department of Agriculture and the biggest feature is its no money down financing. The program can be used by first time buyers as well as repeat home buyers. Homeowner counseling is not required for the USDA Program. By using this Program you can finance 100% of a home’s purchase price and also have access to low; better than average mortgage rates. USDA mortgage rates are often the lowest among FHA, VA, and Conventional loan mortgage rates.

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