USDA Loans are becoming increasingly popular among individuals that desire to purchase a home within rural and suburban regions of the nation.
Until recently, USDA Loans were considered to be one of the least-known mortgage assistance programs offered by the government. However, for those seeking refuge from the paved city life to the rolling hills of sustainable pastures and the country life, these loans are designed by the United States Department of Agriculture to assist in the transition.
A USDA Loan is a mortgage assistance loan that requires no money down. If it designed for individuals that are seeking to obtain property in rural and suburban areas. The loans are issued through a special housing program called the “USDA Rural Development Guaranteed Housing Loan Program” that is offered by the Department of Agriculture. The mission and purpose of this particular program is to aid in the improvement of the economy and to improve the overall quality of life of the rural and suburban areas of the United States. In addition to not requiring any money down, USDA Loans also have very low interest rates.
Loan Guarantees – These types of USDA Loans are offered and guaranteed by participating lenders. Most borrowers are offered low interest rates, even if a down payment is not provided at the onset of the loan. Borrowers that do not put money down or are only able to put a small percentage down are required to put money towards a mortgage insurance premium.
In order to qualify for USDA Loans, the following criteria must be met:
- The applicant must be a citizen of the United States and/or a permanent resident of the country.
- A monthly payment must be made. It must not exceed 29% of your monthly income.
- Your other debts should not exceed 41% of your total monthly income.
- Your source of income should have been established for a period of – at least – 24 months.
- Your credit history must be considered “acceptable”; that is, there should be no collections within the past year nor any derogatory marks – unless you are able to establish that those marks exist due to temporary or uncontrollable circumstances.
For more information on USDA Loans, contact Somerville National Bank today at one of our