There are many different loan types out there. Some are great for the masses—loans like FHA and Conventional. Then, there are loans that have certain restrictions or criteria. VA loans require you or your spouse is a veteran. Jumbo loans are for buying homes that cost more than $417,000. Then there’s the USDA loan, a loan that’s meant for “rural” areas of the US.
Not many people know about the USDA loan because many think that you have to live way out in the boonies to get this loan type. However, the U.S. Department of Agriculture has fairly loose guidelines about what exactly “rural” means, and given some of the perks of this loan, it may be worth checking into should you find yourself needing a home loan. Let’s answer the question, “What is a USDA Rural Housing Loan”?
The Main Perk: 100 Percent Financing
The most exciting aspect of getting a USDA loan is the fact that the USDA offers 100 percent financing. You heard it, that’s no money down on your home purchase. Most other loan programs require between three and 10 percent down, so this is a biggie.
In addition to 100 percent financing, USDA loans are great because they have a lot of the same requirements and guidelines as other loans. They operate on a standard 30-year amortization schedule and offer fixed interest rates.
The Main Catch: Must Be in a Rural Zone
So, what’s the real catch to this seemingly neat housing loan? Well, the main restriction is that the home you purchase must lie in a rural housing area. You can go to the USDA’s website and see if your home is inside or outside their area. Luckily the map of “ineligible areas” looks like Cricket Wireless’s home calling area circa 2004; it’s pretty sparse. You might be surprised to find that your home is indeed in an eligible zone.
As with any loan, there are lots of little things here and there that you should know about before making any decision on which loan to get. This isn’t meant to be a comprehensive guide; just an interest piquing article. If you’d like to hear more of the nitty-gritty details of the USDA Rural Housing Loan, reach out anytime.
My husband and I are looking at a house that has an HOA, but we never lived with one before so we are curious to know if there are benefits to having one. I liked how you pointed out that one good thing is that they will provide a landscape company to help with the yard work. It will be great not having to worry about spending all of our time doing it, but having it still look nice.
Very nice love the colors
I would love to have a tiny home to live in! It seems more manageable and affordable. The Hiatus in Oregon is beautiful. I love the wood floors. can you put a tiny house on any property? Thanks for the inspiration and information!
I have a home in Stamford CT and I am looking for someone to assume my mortgage. Not sure if you are interested in something like this based on what I saw on your website. Eric
Is it possible to buy a first home with a 580 credit score? The house is in Groton ct and is only $90,000