CodeGuard

Rural Home Loans: Knowhow

37 views This article is copyright free and is published in Loans » Finance
Joined: Sep 12, 2014
3478 articles
imagine
A lot of people feel more at home when they are surrounded by nature. If you’re planning to buy a house in rural or suburban areas, then you’ve come to the right place. We have all the information you need to know about rural home loans like the rural development loan.

What is a USDA Rural Development Loan?

The United States Department of Agriculture is offering a 100% financing rural home loan called Rural Development (RD) loan. It reduces the costs for people planning to settle down in rural and suburban areas. This promotes home ownership in the less densely populated areas of USA. Don’t let the name fool you. The word ‘rural’ brings to mind agricultural lands with farmers and cows. But actually 97% of the country representing 109 million people, falls within the eligible area. So, it is highly probable that the house you’re looking for might be eligible for USDA financing.

Advantages of Rural Home Loans

You must be wondering why you should go for a rural development loan.

• The biggest advantage is it’s a 100% financing program and you will need to make zero down payment. This means that this rural home loan is perfect for first-time home buyers.

• The loan doesn’t require a high credit score so qualifying for this loan is easier than most other loan types. The required credit score for being eligible for the RD loan is as low as 640.

• USDA mortgages also have an extremely low mortgage insurance premium of 0.30%. This is the lowest annual MIP of any home loan program except for the VA.

• The USDA rural home loan offers two mortgage options- the 15-year and 30-year fixed rate loans. No adjustable rate loans are available. These are extremely safe programs.

• This program enables people belonging to low and moderate-income households to afford simple, decent and safe houses.

Eligibility for USDA Rural Home Loans

As we have already mentioned qualifying for the rural development loan is easier than other loan types. This is because it does not require a high credit score or a down payment. Let us look at the exact eligibility criteria for this loan.

• The property that you’re looking to buy must be located in a USDA eligible area. You can take a look at USDA maps to pinpoint an address or browse certain areas. If you’re not sure whether the property of your preference is eligible for the loan, you can also ask an USDA loan officer.

• Your income needs to be 115% or less than your region’s median income. The income limit as of 2018 is $82,700 for 1-4-member families and $109,150 for families with 5+ members.

• You have to be a citizen of the United States, an US non-citizen national or a qualified alien.

• You must have an acceptable credit history. You should have no accounts that were converted to collections within the last year. Borrowers who have a credit score of 640 or above get streamlined processing. You may still qualify otherwise by proving that your credit score was affected by temporary circumstances or those outside of your control. A medical emergency would also count.

• In order to be eligible, you would typically need a 2-year history of dependable employment.

• You need to occupy the property as your primary residence.

The USDA program is getting more and more popular every year and thousands of home buyers are opting for it.
About author: Vikram kumar

We hope that this answers all your questions regarding Rural Development Loan like the Rural Home Loans . We wish you good luck in finding a perfect home for you and your family.

CodeGuard

Other article from Finance

Kisan of India Can Get the Best Guides on Farming Practices from Kisan Central
Hyderabad, India (October 29, 2018) – Agriculture is the backbone of India. Nowadays, many farmlands have turned into buildings in the country. However, still, there are farmers, who strictly follow their farming practices. Kisan of India can get the ...
View by 31 people
Posted by Sumanta Dutta in ,
FHA mortgage- What are the special features of this loan?
The best mortgage companies usually present you with a variety of loan schemes. You may have these loans for buying your property in Illinois. All the mortgage types are advantageous in different ways. Federal Housing Administration has insured one of the ...
View by 48 people
Posted by Vikram kumar in ,
VA mortgage- A guide to choose this loan
Most of the property buyers look for mortgage to have the fund easily. VA mortgage or Veterans Affairs loan is one of the financing options to the service members, military veterans and the spouses, buying a house. You will get lots of advantages from this ...
View by 45 people
Posted by Vikram kumar in ,
Reverse mortgage in Illinois- Is it is the right choice to you?
A mortgage company offers loans of various types. The property buyers have to choose the right loan to meet their needs. There are also various requirements to apply for these loans. While you send an application for any mortgage loan, it is better to have ...
View by 38 people
Posted by Vikram kumar in ,
Illinois Mortgage- Find the loan terms and types
Mortgage loan is one of the common financing options to the property buyers in Illinois. However, since there are lots of lenders in Illinois, this loan is available with different schemes. As one of the house buyers, you have to choose the appropriate ...
View by 39 people
Posted by Vikram kumar in ,