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Rural Home Loan in Texas
The USDA Rural Home Loan was designed for low to moderate income families in rural areas. While Texas has some of the largest metropolitan areas in the United States it also has a large amount of rural areas that qualify for the Texas USDA Home Loan. With such areas it makes this a very popular loan product for the state. There are several benefits for Texas borrowers who choose this as their financing option.
The USDA Mortgage is one of only two loan products that offers 100% no money. The other is the Veterans Home Loan. Most borrowers do not qualify for the Veterans loan just because you have to be a Veteran. The USDA Loan is open to anyone so this makes it very popular. Borrowers can put money down if they choose to do so however most don’t just because in the current mortgage market rates are low so it makes very little financial since to tie up ones money when they are borrowing money so cheap.
Another popular feature for Texas borrowers is the Rural Home Loan has a very low factor for mortgage insurance. The monthly factor currently used is .50. This is compared to another government backed loan the FHA Loan which is .85. This difference can add up to hundreds if not thousand’s in yearly savings. Mortgage Insurance is one of those things that people often feel there’s no benefit to them.
The Rural Home Loan also permits the seller on the property to pay up to 6% of the sales price towards the borrowers closing costs. In the majority of cases this is more than enough to cover everything. With that people are literally zero out of pocket on this loan product.
When it comes to credit the Texas Rural Home Loan is extremely flexible. The requirements are 3 years from bankruptcy and 3 years from foreclosure. USDA doesn’t have a min credit score however most lenders require at least a 640. There is a trade line requirement however they do allow what is considered alternative trade lines. Alternative trade lines are things such as utility bills, cell phone bills, and any other monthly obligation that the borrower has to pay.
The Texas Rural Home Loan has many benefits and is extremely popular. Borrowers can purchase a home with little to no money down. They are not required to have perfect credit and the mortgage insurance is much lower than other loan types.