The U.S. Department of Agriculture offers single-family housing guaranteed loans to qualifying residents in rural areas. By insuring home loans up to 90%, borrowers are afforded the luxury of putting 0% down while reaping the benefits of attractive USDA terms and conditions. This guaranteed loan program provides financing for low- to moderate-income families, provided they are at or under the county income limit in their specific county, at low, fixed rates.
USDA Loan Benefits
- 0% down payment needed
- Lower interest rate than conventional loans
- Lower monthly guarantee fee than FHA Mortgage Insurance
- At or below county income limit
- Intended for primary residence
- Rural area guidelines
USDA Streamline Assist
If you already have a USDA loan, taking advantage of their Streamline Assist program is the easiest and most efficient way to refinance. This is a great way to reduce your interest rate and payment without needing to qualify for a loan. While your payment does decrease from the lowered rate of interest, you can choose to send in your previous payment amount; this pays off your loan much faster, because all savings are reapplied toward your balance. The guarantee fee has also recently decreased, which is another reason to look into the USDA Streamline Assist program.
USDA Streamline Assist Benefits and Qualification
- No appraisal needed
- Must be at or under county income limit
- Have the option to make current payment and pay off loan quicker
- No out-of-pocket costs
Can I only have one USDA Loan?
Yes. This type of loan is intended to be used for a primary residence.
Can I have an FHA loan and a USDA loan?
No, you can only have one type of government-insured loan. We can assist you in choosing which option is best suited for your specific situation.
How much of a down payment is needed for a USDA loan?
USDA loans offer up to 100% financing, so there is no down payment necessary.
Do USDA loans have monthly private mortgage insurance?
USDA loans have a guarantee fee that is paid monthly. It is less than half the amount of FHA’s mortgage insurance fee.
Is there a minimum credit-score requirement?
USDA borrowers must have a credit score of 620 or above.
What does it mean that my USDA mortgage loan is guaranteed?
USDA mortgage loans are guaranteed by the Rural Housing Administration, which means that if a borrower defaults on his or her loan, a portion of this loan is insured. Because of that, lenders have more confidence when lending to qualifying USDA customers.
Is there a minimum length of time I must live in my home?
No, you can sell your home at any time and there is no prepayment penalty on USDA loans.