What is a USDA Rural Housing Loan?
A USDA Rural Guaranteed Housing Loan is loan program offered through the USDA office of Rural Development and guarantees loans made by approved lenders.
Why would you consider using a USDA Rural Housing Loan?
Well, this type of loan doesn’t require a minimum down payment so you can borrow 100% of the purchase price of the home. (I am sure the home will have to appraise at that price too. Most banks aren’t going to lend more money than what the home is worth.)
If I borrow 100% of the purchase price, will I have to pay any sort of mortgage insurance?
No, with the USDA Rural Housing Loan Program you will not have to pay PMI (private mortgage insurance).
Can I buy a house under this program just any where?
Unfortunately, you can’t. The home you are looking to buy must be located in a “rural” area. The USDA defines a rural area as open country and place with a population of 10,000 or less residents. Some cities and towns do qualify if the population is between 10,000 and 25,000 residents. So in our area that would be places like Harlem, Dearing, Appling and Thomson all located in Georgia. In South Carolina, some areas in Edgefield and Aiken counties qualify including Graniteville, Clearwater, Edgefield and Trenton.
How does someone qualify for this loan program?
You must have adequate and dependable income and be a U.S. citizen, legally admitted to the U.S. for permanent residency or be a qualified alien. You must have an adjusted annual household income that doesn’t exceed the moderate income limit established for the area. Have a good credit history and can meet the repayment criteria. Please see the USDA automated income eligibility calculator.
Buyers must personally occupy the home and the loan terms are for 30 years. New homes and existing homes qualify for the program as long as they are located in the approved rural area. For more details on the program please see the USDA Guaranteed Rural Housing Loan Pamphlet.Susan MacEwen, Realtor Your CSRA Home Hunter! Executive Partners of Augusta
Mobile: 706-294-6795 Office: 706-364-7653