Empowering Your Financial Future - Contact Us Today
USDA Mortgage Loan
The United States Department of Agriculture (USDA) has developed affordable USDA mortgage loan financing options for homeowners located in designated small towns, suburbs and exurbs. This program helps eligible low- to moderate-income families achieve homeownership by offering a no down payment option.
What is a USDA mortgage loan?
USDA mortgage loan options are often also referred to as USDA/Rural Development Loans, because that is their primary purpose — to generate greater interest in homeownership in rural areas, suburbs and exurbs. Providing affordable homeownership opportunities in these areas promotes prosperity, which in turn creates thriving communities and improves the quality of life in rural areas.
​
These 30-year, fixed-rate mortgage loans are guaranteed by the U.S. Government’s Department of Agriculture, in the same way a VA home loan is guaranteed by the Department of Veterans’ Affairs (VA). There is a no down payment option available to those who qualify. The loan term for a USDA loan will always be 30 years, as all USDA loans are30-year mortgages
​
Who is eligible to receive a USDA mortgage loan?
Applicants must meet the USDA’s income-eligibility limit, meaning the applicant cannot exceed 115% of the area’s median household income. Since area median income varies by locale, USDA home loan income limits may vary by state and even county.
​
The applicant must also be a U.S. citizen, a non-citizen national or what the Department of Agriculture defines as a “qualified alien”. If you are a citizen, a permanent resident or a qualified foreign national who will live in the home as a primary residence, you will meet this requirement.
​
The Department of Agriculture, who guarantees USDA mortgages, dictates that the household must show that they are able to afford the mortgage payment, including property taxes, homeowners insurance and the annual USDA guarantee fee, which is payable in part at closing and the rest on a monthly basis, which is usually lumped in with the monthly mortgage payment.