USDA home loans or sometimes called rural development loans, are government-insured mortgages that help potential home buyers buy a home without a down payment. The USDA home loan program was created in 1991. This program was designed to help aid potential home buyers obtain a mortgage with a decent rate in rural areas. This program will allow a potential home buyer or home owner to accomplish purchases, refinances, renovations or repairs. For the most part, this program can offer minimal to no out of pocket closing costs. This is because the potential home buyer can finance their closing costs into the loan on the home and receive seller assistance. In addition, the potential home buyer can be eligible for no down payment through the USDA program; however, there are income guidelines that must be followed in rural areas.
Because USDA home loans are so popular and are known as one of the best home loans available there, are strict guidelines attached to this loan. For example, the home must be in median price, be located in a HUD-designated area, and there are income requirements.
Potential home buyers must meet the following eligibility requirements: