Purchasing a first home is an exciting milestone in any person's life. However, those unfamiliar with purchasing a home - especially with a USDA Loan - will often find themselves with quite a few questions.
Below we look at the benefits of USDA loans and cover common questions about the program.
The USDA loan has significant advantages for rural homebuyers. These benefits include:
First-time homebuyers should understand that the USDA loan has qualifications for the homebuyer and property.
Homebuyers must meet their lender’s and the USDA’s credit and income requirements. This often includes a 640 credit score, which is the cutoff for automated underwriting – however, lower credit scores may still qualify. Homes being purchased with a USDA loan must be used as the homebuyer’s primary residence and be located in what the USDA considers a rural area. Fortunately, the USDA’s definition of rural encompasses homes ranging from small towns to suburbs of metropolitan areas.
After deciding if now is the right time to buy, many potential homebuyers then ask themselves, "How much can I truly afford?"
This question takes on many factors, including you and your family's income, additional debts, a potential down payment - which isn't required with a USDA Loan - in addition to costs like homeowners insurance, property taxes and HOA fees if applicable.
To help determine what you can afford, see this convenient USDA Mortgage payment calculator.
This USDA Loan calculator gives you a snapshot of what your monthly payments could be as a first-time homeowner using the USDA loan.
Here you will find a list of common questions on the USDA loan.
Speak to a USDA loan specialist and find out if you qualify for a USDA loan.