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The USDA Home Loan Process

Buying a home is one of the single-largest investments in a person’s life – and also one of the most exciting. A home is more than a financial investment, but a step toward the American Dream, something the USDA Home Loan program works hard to uphold.

Within the USDA Home Loan program you will find there are certain steps you will need to take to make the process smoothly. And, to help our potential homeowners, we have outlined these steps below.

1) Prequalify with USDALoans.com

Prequalifying for a USDA Loan provides a general estimate of what you can afford, and if you are even eligible for the program. This is a vital step that can save you much time and effort through helping you narrow down what homes you will be able to purchase.

2) Receive Your Preapproval Letter

Preapproval is a more thorough process, taking account of pay stubs, tax returns, W2s, your employment history, investments and other assets. At this stage, the paperwork may seem like a lot, but once you are approved and receive your preapproval letter, sellers are more likely to take your offers serious.

Be sure to remember that preapproval doesn’t mean you are guaranteed a USDA Loan. There are often stipulations that must be met, such as not taking on any new debt or credit.

3) Find Your Desired Home

If you haven’t already, find a knowledgeable realtor and start the home search. Armed with your preapproval letter, and the knowledge of what areas are eligible for a USDA Loan, you and your agent will have no trouble securing your dream home.

4) Make an Offer

After you found your home, it’s time to make an offer. Be sure your real estate agent is aware you are using a USDA Loan and prepares your offer so that the seller pays closing costs – keeping your loan zero down. If you cannot negotiate closing costs into your offer, know that the USDA Loan program does allow gift funds from family or non-family members to pay for closing costs. However, you will need a gift letter to accompany your application.

5) Processing & Closing

Following the offer, you will need to set up an inspection of the property to ensure the dwelling meets USDA Home Loan standards and that the home is move-in ready. With the USDA Loan, if a property does not meet standards, it must be fixed by the seller before closing.

Once you are under contract, an underwrite will review your information to ensure there have been no major changes, as mentioned above. Following underwriting, and the loan is approved, a closing date will be scheduled. At closing, you’ll sign paperwork, finalize your USDA Loan and take ownership of your new home.

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Using a USDA Loan?

Call (877) 701-8732 or Get Started