A USDA loan is a mortgage loan that is guaranteed by the United States Department of Agriculture (USDA) and is available to eligible borrowers in rural areas. The purpose of USDA loans is to encourage rural development and homeownership by offering affordable financing with flexible eligibility requirements.
USDA loans are available for both purchase and refinance of primary residences, and they offer several benefits to eligible borrowers, including:
- No down payment requirement: USDA loans do not require a down payment, which can make it easier for eligible borrowers to buy a home.
- Low interest rates: USDA loans typically have lower interest rates compared to conventional loans, which can result in lower monthly payments.
- Flexible credit requirements: USDA loans have more relaxed credit requirements compared to conventional loans, making it easier for some borrowers to qualify.
- No mortgage insurance: Unlike FHA and conventional loans, USDA loans do not require mortgage insurance, which can result in significant savings over the life of the loan.
To be eligible for a USDA loan, the property must be located in a designated rural area, and the borrower must meet certain income requirements. The exact requirements can vary depending on the specific loan program and the borrower’s circumstances, reach out to discuss with a Valiant Mortgage loan officer today!