March 15th, 2018 7:36 AM by Jackie A. Graves, President
you think you can’t afford to buy a home, it’s worth taking a close look at the
U.S. Department of Agriculture’s (USDA) mortgage assistance program.
program is not for everyone—there are restrictions tied to geography, income,
credit history and citizenship—but it’s zero-down-payment mortgages make home buying a viable
option for many Americans of modest means.
home loans: An overview
USDA mortgage assistance program was designed to make it easier for Americans
to purchase homes in rural and suburban parts of the country. Qualified
individuals are able to receive a low interest rate home loan backed by
the government and issued by local participating lenders. Home loans backed by
other government agencies, such as the Federal Housing
Administration and the Veterans Administration, are similar to
those offered by the USDA. However, the USDA program offers different
eligibility requirements, and some more favorable loan conditions.
addition to its main loan guarantee program, the USDA also has two other
programs to help Americans afford owning a home—one that
provides direct loans to very low-income people and another that offers grants
for repairing or upgrading homes.
you eligible for a USDA home loan?
may qualify for a USDA home loan if any of the following statements describe
makes USDA home loans so appealing
you are short on savings you
probably aren’t able to pull together the down payment that’s normally needed
to buy a home. Once approved for a USDA loan, however, you’ll receive a
mortgage loan for 100 percent of the purchase price of your new home with no
down payment required. What’s more, you won’t face a high interest rate as the
price of skipping the down payment. Private banks and mortgage companies don’t
need to worry about the loans defaulting, since they are backed by the USDA, so
they are typically able to offer very low interest rates.
is an extra cost in the form of a mortgage insurance premium that comes with
the USDA backing your home loan, but this premium is very small compared to the
similar fees associated with other government-backed home loans. And you can
roll the cost into the loan amount if you don’t want to pay it out-of-pocket.
to get approved for a USDA home loan
the USDA’s website to learn if you qualify and view a map of eligible
locations. Then find a participating lender who can help you apply for a USDA
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