What is USDA loan program?
USDA loan program is one of the most affordable and cost-effective loan programs which many Americans are unaware and are taken aback by the name itself. Are you planning to buy a home? But you donâ€™t have the money? USDA loans help you to get the advantage of 100% financing with zero down payments and low closing costs. If you do not have much savings or your income is low such that it cannot afford to pay down payment for a loan, then USDA home loan is an excellent option. The U.S department of Agriculture supports and insures USDA loans. This program has a repayment schedule where you do not have to give any pre-payment penalties. Your loans get approved without any counselling and all first time as well as repeat buyers can avail their loans.
What are the USDA loan requirements?
There are some of the rules and regulations you need to follow according to the USDA loan department. Some of them are discussed below.
â€¢ The first and most important criteria to be financed are that your property should be located in one of the USDA designated rural areas. There are several Federal Home Loan Centre Counsellors who would guide you to determine whether the property falls under USDA designated areas or not.
â€¢ The USDA loan term is for 30 years and at a fixed rate.
â€¢ If your property is a primary residence, taking USDA loans are applicable for you. They do not finance for investment properties or second homes.
â€¢ Both sellers and lenders can contribute towards the closing cost. The only criterion is that the closing cost should not be more than 6% of the total sales price.
â€¢ Being a buyer, the applicant must maintain a decent credit history. You must be eligible to depend on the debt-to-income ratios. This is necessary so that you are able to repay conveniently.
â€¢ Closing costs are allowed by the USDA itself. You do not have to worry about it.
â€¢ Not more than 115% of the area median income is allowed for the homebuyer.
In order to avail the USDA loans, you should qualify all of their guidelines and requirements. These requirements were made in order to provide support to the families and help to avail a clean and decent dwelling. According to USDA, you can only buy property in the present in the rural areas of the country.
Are you unsure about the eligibility to USDA loans? There is a pre-qualification available from the lenders. All you need to do is submit your estimates of finances, your assets along with other information. Before you purchase home loan, an appraisal is required in order to show the current market value of the property you are buying. There is a appraisal management company which looks after all the appraisal of the USDA home loan.
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Article Added on Saturday, September 22, 2018
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