What is a USDA Rural Development Loan?

Rural Development Loan

What is a USDA Rural Development Loan?

When you hear USDA do you think Steak or Home Loans?  The USDA Rural Development Home Loan is better than your favorite cut of premium steak.

What is a USDA Rural Development Loan?


Rural Development loans  are offered in rural areas as determined by the United States Department of Agriculture (USDA).  Their mission is to help lower income households obtain home loans at reasonable mortgage rates.  You might be surprised by some of the areas that qualify.  When you think rural you might get a picture in your mind of a winding dirt road far from “civilization.”  In reality there are many areas across the state of Michigan that would be classified as Rural Development territory.

What areas qualify for an RD loan?


Feel free to follow this link and input any address to see if it qualifies:

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp

Why would a buyer consider an RD loan?


Some benefits of a USDA Rural Development Loan:

  • 100% Financing (That means this is a 0% Down loan program)
  • No maximum purchase price
  • Competitive 30 year fixed interest rates
  • Flexible credit guidlines
  • Allows for purchase and no cash out refinances of primary residences
  • If the home appraises at a higher amount than your purchase price RD will allow you to “roll” the difference into your loan to lower the amount of money you will bring to closing.  For example if your purchase price was $100,000 but the home appraises for $102,000 you could “roll” the additional $2,000 into the loan and lower the amount you bring to closing by that much.  Pretty cool!

Are there people that would not qualify for an RD loan?


There are restrictions to the amount of money an individual or household can make per year.  Those restrictions are based on the county you are purchasing in and the number of people that will be living in your home.  If you happen to make too much money to qualify for a Rural Development Loan, congratulations 🙂  I say that because I have actually had clients that were disappointed they did not qualify.  This is one of those times you just have to say, “I’m gonna look at the glass half full instead of as half empty.”


 

HAVE QUESTIONS ABOUT USDA RURAL DEVELOPMENT LOANS OR WANT TO GET THE PROCESS OF HOME OWNERSHIP STARTED? CONTACT ME OR FOLLOW THIS LINK TO DOWNLOAD MY free mobile app

 

 

 

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