New home buyers in Utah have the benefit of having the USDA Home Loan available to them. A large part of the state qualifies for the loan and people are taking advantage of it in large numbers. The Utah USDA Loan is a very attractive loan for many reasons. Buyers are usually first drawn to it because it offers 100% no money down financing. Buyers do not need to save or use money for a down payment. While this is a great feature it is definitely not the only reason they are using the USDA Home Loan.
Home buyers in Utah that decide to take advantage of the USDA Home Loan will enjoy the fact that the loan product allows the seller to pay up to 6% of the sales price towards the buyers closing costs. For example on a $125,000 sales price the seller can pay up to $7,500 of the buyers closing costs and pre-paids. This is almost always more than enough to cover everything. This coupled with the no money down feature allows the buyer to get into the home with no out of pocket costs.
While many loan types have stringent credit criteria the USDA Home Loan is much more aggressive in this area. Home buyers only need to be 3 years removed from a prior foreclosure and 2 years from a prior bankruptcy. Additionally they can use alternative trade lines in place of the required normal 3 trade lines. Things such as auto insurance, cell phone bills, and utility bills can be used with a proven payment history. USDA does not have a minimum credit score however most lenders will go as low as 620.
The Utah USDA Home Loan does have restrictions on where the property can be located. The good news is a large part of the state qualifies. USDA loans were designed for home buyers in rural areas but that is a little misleading because often times areas just outside of major metro areas qualify. The maps are based on the most recent census and typically areas with populations below 20k will qualify. The best way to make the determination is to use the USDA Eligibility Map.
While most loan types where the borrower does not have 20% down requires some form of mortgage insurance. The USDA loan is not much different in that it does have fee’s paid to the government that are called guarantee fees. The good news again is that they are very low compared to other loans.
Primary Residential Mortgage, Inc.
Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.