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A USDA loan (also called a Rural Development Loan) is a government insured home loan that allows you purchase a home with NO Money Down. USDA Loans offer 100% financing to qualified buyers, and allow for all closing costs to be either paid for by the seller or financed into the loan. USDA offers some the lowest rates of any loan, and you will always have a fixed interest rate.

USDA Loan Guidelines

Credit History Credit history must indicate a reasonable ability and willingness to meet obligations as they become due. A major influence is paying bills before they become turned over to collections. However, if you have had blemishes in the past, these may be overlooked if you have reestablished your credit over the past 12 months.

Property Restrictions When an individual or family is seeking a USDA mortgage, the property must be used as the primary residence. However, keep in mind that both new and existing homes are eligible. In addition, there is no restriction placed on the design, size or layout of the home. The prospective property, however, must be declared as safe, sound and sanitary, meeting all the necessary building requirements in the area.

Property Locations Keep in mind that USDA loan program has nothing to do with farmland. Instead, most rural areas qualify for USDA mortgages. This is generally defined as being located outside of the city limits and within an area with a population of less than 20,000.

Income Requirements Each county has specific income limits that determine USDA mortgage eligibility, and your current income must not exceed the limit set for that county. While the income limits are based on family size, they are not intended solely for low income families. Instead many low to moderate families can qualify.

USDA Home Loan Credit and Income Limitation If the home is in an eligible area, you must not exceed the current yearly USDA income limit set for your county. Finally, assuming you meet both the location and income requirements, the final requirement is an evaluation of your credit history. The USDA Rural Development loan program does not have a strict credit score guideline. Rather, it evaluates your credit history in an effort to ascertain your willingness to meet repayment obligations.

Never assume that you do not qualify for a USDA Mortgage. Even if you think that you may fall outside of these guidelines, Summit Mortgage Corporation may still be able to help. We have worked with dozens of families, helping them navigate these sometimes confusing mortgage guidelines.

USDA or Rural Development Loans are only available in specific areas, for more information on if your property qualifies please contact Summit Mortgage or visit the USDA website to find their current acceptable boundaries.