Brief Overview Of A USDA Loan
In 1991 the U.S. Department of Agriculture (USDA) started offering rural development loans to encourage home buyers to live in rural and suburban areas. The USDA did this to promote growth and boost the local economies of these areas by making land and property more affordable.
For the borrowers that meet USDA loans requirement, they offer many benefits paired with relatively lenient approval requirements. Government backed and insured they offer:
- NO money down
- Low interest rates
- 30 year fixed rates
- Government guaranteed
- You have the ability to roll in your closing costs into the loan
- Flexible credit guidelines
So if you want to live in a suburban or rural area – generally with a population of 20,000 or less then a USDA loan may be your answer to owning your new home secondly each county has specific income limits that determine USDA Eligibility, and your current income must not exceed the limit set for that county. Our USDA loan experts can help you find out if you are eligible Call now on 1-866-854-4242.
Complete Guide To USDA Home Loan Program : Last Updated Feb, 2019
Introduction to the USDA Loan Program:
The United States Department of Agriculture Loan Program, also known as the USDA Loan Program was created by the United States Department of Agriculture’s Rural Development Housing and Community Facilities as a primary way to influence the development of rural areas by offering an easy way for borrowers to procure housing. The development of rural areas begins with introducing an incentive to force increased population for these areas, and the USDA loan program does exactly that. With increased population comes a stimulation of growth for the area in question. The USDA loan program has incentives for borrowers willing to purchase a home in rural areas that other loan programs do not have. These incentives include and are not limited to: lower credit requirements than other programs, little to no required down payments, and other loan program specific benefits. While the USDA Loan Program’s main goal is the development of rural areas, this directly also helps extend ownership to those who may not have qualified for other loan programs without considerable credit, assets, or income. The financial assistance provided by the USDA Loan Program grants the ability for very low income families to obtain safe and sanitary housing at a very affordable cost.
Why was USDA Loan Program created:
The USDA Loan Program was created to aid in the development of rural communities in the United States. This is a government program specifically tailored towards families with lower income to achieve home ownership in specified rural locations. By focusing on these rural areas, the government was actually helping develop these locations by increasing the population. Increased population means increased demand for businesses, increased opportunity for employment due to those businesses, which directly influences the overall development of this rural area. However, keep in mind that because of this, areas that are considered rural by Rural Development can change based on population. Ultimately, the USDA’s influences on the development of rural communities helps very low income families get into homes they would otherwise not be able to afford, while also creating booms for the economy indirectly by providing this housing assistance program at affordable rates.
How Does the USDA Loan Program Work?
The USDA Loan Program works by having the Rural Development Housing and Community Facilities funding and providing affordable, safe and sanitary housing for very low income families in rural areas [ check income eligibility here ]. Due to this being a government program, there is funding that is available for financial assistance either to help with the loan directly, or by providing grants for home improvement. The USDA program also provides no money down loans as well, making this a very attractive offer for low income families. Remember that these homes must reside in USDA’s rural maps. These maps can be found at the USDA’s official website [ https://eligibility.sc.egov.usda.gov ]. As mentioned before, these rural areas do change based on population, leading to the expansion of some rural areas and the reduction of others.