California USDA Loans

 Homebuyers in California have several options when it comes to financing their home purchases but for those located in qualifying areas there are few better than the California USDA Loan.  The USDA Rural Development Home Loan has so many benefits. The first and foremost thing about it is that home buyers can purchase a home with zero money down. The only other loan type available in today’s market with a zero down feature is the Veterans Home Loan. The problem is if a person is not a veteran they do not qualify which leaves the USDA Loan the only 100% loan for most people.

Besides offering buyers in California no money down the USDA Loan also has several other benefits such as the credit criteria. While USDA doesn’t officially have minimum credit scores most lenders will allow scores as low as 620. Also buyers with minimal open and active credit trade lines can use alternative credit such as utility bills and cell phones to establish credit.  Buyers who have had previous bankruptcies only need to be 2 years removed as well as 3 years from previous foreclosures.

USDA Loans have their own version of mortgage insurance which is called guarantee fees. It’s the same principal as other loan types where 20% is not put down and mortgage insurance is needed. The good news about the California USDA Loan is that the upfront amount of 2.75% has little impact on the payment because it is spread over 30 years and the annual amount is only .50%.

Another popular feature is that buyers can have the seller pay up to 6% of the sales price towards their closing costs. This is usually more than enough to cover all costs for the buyer. With this along with the no money down feature the buyer can purchase the home with zero costs to them. 

The USDA Loan has become increasingly popular with California home buyers. Buyers must meet family income requirments and purchase a home in a qualifying area. If they can do these two things it is without question that this is the best loan type.