One of the most promising government-backed loans in the market is the USDA loan.
With a low down payment and no mortgage insurance fees, this one’s really something to consider.
But here’s the catch. Your property has to be located in an “Eligible Rural Area”.
There’s no chance your home is sitting on top a rural estate! When you think of “rural”, you picture out farms where you raise livestock and grow fresh produce. Well, think again!
You might be living in an urbanized city where there is no way you can raise chickens but you’ll be surprised to find out that it’s still considered an eligible rural area by the USDA.
It’s Not Just for Farmers
Gone are the days when you think of USDA loans as “just for farmers”. With a sack full of “home loan goodies”, you just want to sweep in and snatch it!
Although the USDA wants to make sure that the property is modest and meets a standard requirement concerning water and waste, you don’t actually need to live in a barn.
The USDA defines a rural area as any town, city or densely settled area with a population that does not go above 10,000 residents. There are instances, however, that an area is located in an MSA (Metropolitan Statistical Area). For it to be eligible, it has to have no more than 25,000 residents.
How do you check for area eligibility?
One quick way is to use the Property Eligibility Map Tool on the USDA site. Here you can type in your complete address and click “Go!”. This tool will then look up your address and will determine if the property is located in an eligible area or not.
One other option is to talk to a local USDA representative to check for area eligibility. You can also confirm the information you see in the site. They can also provide you with other guidelines you need to know about a USDA Home Loan.
Affordable Loan Option
The USDA loan was designed to make homeownership on rural areas sustainable. And if homes are made affordable, families will stay and will live better lives. This greatly helps in the development of such areas.
This loan program is known to have some of the lowest mortgage interest rates. Also, eligible borrowers can stretch out the loan to a 30-year term. This makes monthly payments more economical.
Aside from that, it is possible to get a USDA loan without a down payment. Although the USDA requires an income eligibility, it just wants to make sure you have enough financial resources to pay the loan steadily.
Aside from area eligibility, there are few other eligibility requirements the USDA has set. Their eligibility site will help you understand each of the requirements. Looking for lenders needs some time and effort. Maximize your available resources and find the best one out there.