The USDA Rural Development initiative has five distinct programs:
- Housing Programs
- Community Programs
- Business Programs
- Telecommunications Infrastructure Program
- Distance Learning and Telemedicine Program
As you probably know, the housing programs area is the most popular and most funded aspect of the Rural USDA initiative.
USDA loans are attractive to homebuyers because USDA is one of the few loans that offers 100% financing. This means that with a USDA rural home loan, there is no down payment required for borrowers.
USDA Rural Housing is Ideal for?
USDA is a great loan option for first-time homebuyers who may have limited savings and cannot obtain the high down payments required by most of the conventional mortgage loans. Indeed, USDA loans are intended for people with limited means, which allows people an opportunity to own their homes who would otherwise have no way of doing so.
Of course, the USDA is backed by the United States Department of Agriculture (USDA). It is a government-backed program that provides many homeownership opportunities. The 502 Guaranteed rural USDA loan is the most popular program, as it is geared towards moderate-income borrowers. This program is backed by the USDA, but it is only offered through approved lenders like AmeriSouth. This program does have qualifying household income restrictions. For example, the qualifying income for the household can be up to 115% of the area’s median household income.
Like all government loans, a USDA loan is a secured fixed rate mortgage with no early termination or early payoff penalties. This is one of the few remaining programs in 2019 that still allows homebuyers to purchase a home with no down payment.
Which Properties are Eligible for a USDA Home Loan?
Any single-family residence that’s located in a USDA-eligible property, regardless of who is selling the property, will be eligible for 100% financing with a USDA loan. It can be a short sale type of purchase, such as a foreclosure. The most important factor is the location, as the property in question must be located in a USDA-eligible area. If you have any questions about the property you’re interested in, contact AmeriSouth, and we’ll help you determine if your property is eligible.
Which Properties are Not Eligible for USDA Home Loans?
Any home that is in generally good overall repair will be eligible for the rural USDA home loan program, but homes that require extensive rehabilitation will not be eligible. Also, only primary residences are eligible for USDA loans, so this means investment properties or second home purchases would be disqualified.
Building a home on your own lot is not allowed by the USDA loan program. However, this does not apply to new construction that is being sold to you by the homebuilder. Also, mobile homes are not eligible unless they’re brand new. In such a case, financing must be arranged through an approved dealer. If you have any questions about rural USDA loan eligibilty or wish to apply for a USDA loan, AmeriSouth offers fast approval and attractive rates. WE invite you to start your loan application with us.