Rural Home Loan

One of the most distressing obstacles a potential homebuyer must overcome is financing. You can have flawless credit and a great paying job, but if you’re unable to come up with the necessary down payment and closing fees associated with purchasing a home, you’re out of luck. Fortunately there are other options. The USDA rural home loan is one of few zero-down mortgages on the market. Most people don’t have adequate savings to cover 10%-20% of a home purchase. The USDA rural home loan allows you to purchase a new home with absolutely nothing down.

Even buyers with substantial savings choose the zero-down loan because they want to save their cash for other expenses or unexpected emergencies that may arise. The USDA rural home loan lets you purchase a home without becoming “house poor,” meaning you have a house but no money for anything else. You can instead use your savings to do some home improvement or purchase furniture and appliances instead of worrying about how you will cover these moving expenses. Having more cash on hand makes it easier for you to meet your loan obligations without jeopardizing other aspects of your life.

The USDA rural home loan is perfect for first-time homebuyers who likely don’t have a lot saved. College graduates with student debt are also drawn to the loan’s affordability. Not only are no down payments required, closing costs can also be wrapped into the total loan cost instead of being paid upfront. This means you can walk away from the closing table with no money out of your pocket.

Buyers with weaker credit histories have a shot at homeownership with the USDA rural home loan. Credit standards are very lenient compared to similar home loan options. Credit scores as low as 620 are accepted and many blemishes like past collections, foreclosures, and bankruptcies can be overlooked. Most people don’t have perfect credit, especially if you’re carrying a lot of debt from school or medical emergencies. USDA recognizes these struggles and urges lenders to look past them. They’re also willing to work with you if you don't have sufficient credit. Other lines of credit such as utilities and rent may be considered to determine your credit worthiness.

In the early 1990s, USDA began its mission to stimulate the economy in rural and underdeveloped areas nationwide. By developing rural home loan, they intended to give lower income and modest earner households the ability to purchase a permanent home without the need for large down payments. True to its original mission, today’s USDA rural home loan offers the zero-down service to households within their income guidelines. The homes financed must be located in an approved area in a rural or suburban neighborhood. You can purchase a new construction, existing home, or foreclosure with a USDA rural home loan.