There are a number of great mortgage programs that help make homeownership more affordable, one of which is the USDA Rural Development Loan. If you prefer to buy a home in a rural area, you may be able to take advantage of a USDA loan allowing you to purchase a home with as little as no down payment, among other perks.
What is the USDA Loan Program?
The USDA loan is backed by the U.S. Department of Agriculture and offers a path to homeownership for low- to moderate-income families who are interested in purchasing a home in areas deemed as ‘rural’ by the USDA. You may be surprised to find that many of the eligible geographical areas are far more suburban than you’d expect. If living down a lone country road isn’t your thing, you might still be able to take advantage of a rural development loan!
What Are the Benefits?
1. No Down Payment
One of the best perks of the USDA loan program is the fact that no down payment is required. More often than not, lack of a large lump sum for a down payment is one of the biggest barriers to homeownership. If you qualify for the USDA loan, you won’t have to worry about coming up with a big down payment, or one at all. Other loan programs have a minimum down payment requirement, so being able to finance 100 percent of a mortgage is advantageous if you can take advantage of the USDA loan.
2. Flexible Guidelines
All mortgage programs have certain eligibility requirements, but some are more forgiving than others. Though you must purchase or refinance a home in an eligible area to qualify, the USDA loan is flexible when it comes to credit requirements. If you have a limited credit history or less-than-stellar credit, you may find that you can qualify for a rural development loan. It’s always worth discussing your situation with a C&F Mortgage local industry expert because there’s usually a program out there that will work for your needs.
3. Affordable Mortgage Insurance
The biggest downside of not putting 20% down when purchasing a home is the fact you’ll be required to pay mortgage insurance on the loan. The USDA loan program approaches mortgage insurance a bit differently than a conventional loan program in that borrowers will be required to pay an upfront guarantee (1% of the total loan) as well as a monthly fee that is rolled into each mortgage payment.
How Do I Qualify?
One of the first things you should be when beginning the home search process is sit down with a C&F Mortgage local industry expert and discuss your financing needs. This is the best way to understand what home you can comfortably afford and whether or not you qualify for a no-down-payment mortgage program, such as the USDA Rural Development Loan. Your C&F Mortgage local industry expert can also help you with things like budgeting and improving your credit score before you begin the loan process.
When you’re ready to begin your journey to homeownership, C&F Mortgage is here for you. Our local industry experts are focused on you every step of the way and will help you navigate the process from start to finish. Get in touch with us today to get started.
Edited 4/9/2021. The information contained herein (including but not limited to any description of C&F Mortgage Corporation and its lending programs and products, eligibility criteria, interest rates, fees and all other loan terms) is subject to change without notice. Restrictions apply. This is an advertisement and not a commitment to lend. C&F Mortgage Corporation NMLS# 147312 Equal Housing Lender.