USDA Rural Development Loans
USDA Rural Development’s Single Family Housing Guaranteed Loan Program is an excellent program for those low to moderate-income families looking to purchase in a rural area, who do not have money to put down for a down payment but do have acceptable credit ratings. Both the borrower’s income and the home’s location must meet USDA’s eligibility guidelines. Currently, this loan is only offered on a 30 year fixed rate term. There is no down payment required, which allows you to finance 100% of the purchase price.
A USDA Guaranteed Loan is a government insured 100% purchase loan. USDA does not make a loan directly to a borrower, but guarantees a loan made by a direct lender that meets federal guidelines. The loan amount cannot exceed 100% of the appraised value; however, the guarantee fee may be financed and included in the loan amount. USDA loans also require an annual premium that is paid monthly. These loans are offered in rural areas and serviced by direct lenders.