Do you live a rural area and are looking for a home loan? A USDA loan may be the right fit for you. Learn more about how USDA loans work and some of their requirements.
When you’re purchasing your dream home, it is helpful to know about the different types of loans available to you. From conventional mortgages to government sponsored home loan programs, there are many options, so it is a good idea to talk to your lender about which loan program is best for your specific situation. For many people in small towns and rural areas, a loan guaranteed by the United States Department of Agriculture, often called a USDA loan, is an option to consider.
USDA loans, sometimes called rural development loans, are for qualifying low-to-moderate income borrowers in rural areas. The program is intended to help improve the economy and quality of life in rural America by providing financing opportunities for affordable housing, including manufactured homes.
For those who qualify, the USDA guaranteed loan program can be an affordable financing option. USDA loans can offer benefits such as zero percent down payment options, flexible credit requirements, typically lower fixed interest rates and the ability to include closing costs in financing. However, upfront and annual guarantee fees as well as ongoing mortgage insurance premiums could be included in the loan as well.
When it comes to qualifying for a USDA loan, there are certain requirements that must be met, and these can vary state by state. It’s a good idea to check with your state’s local rural development office for more specifics. To be eligible for this type home financing, borrowers must:
Getting a USDA loan is similar to getting a conventional mortgage or FHA loan because your chosen lender handles all of the transactions, from taking your application to issuing the final approval. In order to apply for this loan, you need to make sure that you select a lender that is already approved by the USDA to offer this special loan program. You can contact your state’s guaranteed loan coordinator for information about all of the approved lenders in your area.
Finding the right financing for your manufactured home is based on you and your circumstances, which is why it is good to ask a lender for quotes and compare the total costs. And remember, the choice of lender is always up to you! Choose a lender you feel comfortable with and who’s able to answer all your financing questions.
Want to learn more about different types of loans, budgeting, the home loan journey and more? Check out our Home Investment category on our Studio blog to find the answers to all your home financing questions.