Are you hoping to buy a home in 2017 but worried about the down payment? Looking to live outside of a big city – whether that be in a small city, town or out in the country with plenty of space? Many Americans can afford the monthly mortgage payment on a home for their family, but have trouble coming up with the 20% down payment that conventional mortgages generally require for offsetting the additional expense of private mortgage insurance, or PMI. In many areas of the country, coming up with a 20% or even a 10% cash down payment means saving up tens of thousands of dollars just for this one purpose. Most buyers understand that they will likely need some cash on hand after they purchase their home, either to fund moving expenses or to buy new furniture to fill their new home. Saving for both a down payment while maintaining your emergency savings fund and keeping money on hand to cover the normal expenses that come with a home purchase can be daunting. Luckily, the federal government has several loan programs in place that are perfect for buyers who are financially ready to purchase a home but either lack the savings required for a down payment
USDA mortgage loans, also known as Rural Housing Loans, are loans which are backed by the federal government – by the US Department of Agriculture specifically. This loan program is designed for buyers who are “low to moderate” income and who are buying in rural and suburban areas. The definition of “rural” within this loan program is quite broad, and you may be surprised to find all the areas of the country where homes will fall into this loan program’s eligibility guidelines. There are many small cities, towns and even college towns which qualify under the terms of the USDA loan program.
No – USDA loans can cover 100% of the purchase price of your home. USDA loans require no down payment!
Besides the obvious benefit of no down payment, which can help you to achieve your savings goals faster, USDA loans offer other unique benefits to home buyers. Some of the key benefits of USDA loans include the fact that you may be able to wrap eligible home repairs and renovation expenses into your loan and that rates for USDA loans are very competitive and may be lower than that of conventional mortgage loans!
If you are interested in living outside the big city – whether that be in a smaller city, town or out in the country – USDA loans might be the mortgage loan that will get you into the home of your dream faster than you thought possible. If you and your family are hoping to buy a home in 2017, call your experienced mortgage professional today to learn more about all the lending programs available on the market today, including USDA mortgage loans.