May it be the internet or the good old word-of-mouth, sources could bring misconceptions that raise doubts and questions. And like any other housing loans, USDA loans have their fair share of misconceptions.
However, we can shed some light on these things and finally debunk the myths about it for a clearer understanding on the matter.
Misconception: “USDA loans are for farmers and for farms only.”
People usually associate “ rural” to farm areas or somewhere miles away from the city when in fact it’s not. The USDA housing loan is available for everyone as long as they do not go beyond the maximum income limit and the property must be in a USDA designated area.
Misconception: “Maybe this is just for borrowers with low-income.”
No. USDA loans are offered to anyone who is eligible therefore it’s not just for low-income borrowers. However, they require borrowers to have an income that does not exceed 115% of the median income of the area.
Misconception: “There should be some catch if USDA loans don’t require a down payment.”
Some might think this is too good to be true. Some would also think that what they really meant is the Veterans Affairs loan but this is a non-military loan that also gets 100% financing. Credit score doesn’t also need to be perfect in order to qualify. But it needs to be kept in mind that home loan rates may vary in line with the credit score.
Misconception: “You can only get a USDA loan once.”
What really matters is you have to meet their requirements and criteria. The number of times you apply for a USDA loan doesn’t have any strict restrictions.
USDA loans have earned quite the popularity these days. It’s quite easy to explore more about this option with all the resources at our fingertips nowadays. If it helps ease your doubts, you can talk to experts or refer to their website to see if you’re eligible.