USDA loans are offered to rural and suburban property buyers at low interest rates. Homeowners can also get a USDA loan for home improvements. These loans are backed by the U.S. Department of Agriculture and disbursed by recognized private lenders. Despite the many advantages of USDA loans such as attractive interest rates and low monthly mortgage insurance, many homeowners have skewed or limited knowledge about them. To help spread awareness about USDA home loans, the post discusses some useful info about them. Take a look.
Types of USDA Loans Guaranteed Loan Guaranteed loans can be raised by households whose income is up to 115 percent of the median income for the area. The loan is provided to borrowers who don’t have a residence but can afford the mortgage payments. Before applying for a Guaranteed Loan, borrowers must check the Maximum Household Income limits set by their county to determine eligibility. As is the case with other USDA loans, borrowers would be required to pay an upfront funding fee of 2.75 percent of the purchase price. Direct Loan Direct Loans are provided to applicants who fall in the very low or low income category (low: between 50-80 percent of the median income for the area, very low: below 50 percent of the median income for the area). A Direct Loan can be used to build, repair, renovate, and relocate a home. Though, borrowers must have a reasonable financial standing to afford mortgage payments, they can be eligible for payment subsidies. Rural Repair and Rehabilitation Loan Rural Repair and Rehabilitation Loans are provided to senior homeowners (age: 62 years or more) who fall in the very low income category. Borrowers can use the loan amount to finance necessary repairs, and renovations that can help address safety and hygiene issues. These loans are provided to homeowners who are unable to secure credit elsewhere. Pros and Cons of USDA Loans Benefits
Shortcomings
Conclusion Easy payment plans, zero down payment, and flexible qualifying criteria make USDA loans one of the most accessible government loan programs. Though borrowers are required to get mortgage insurance, they can finance the cost into the loan which helps in lightening the payment obligation. Individuals looking to raise a USDA loan must visit USDA’s official site before applying for a loan as the eligibility criteria keeps on changing every year.
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AuthorDarrick encourages readers to post issues that need immediate attention in terms of home buying; such interactions will enhance reader engagement and provide a road-map for others Archives
November 2017
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