A USDA home loan is a zero-down payment mortgage for qualifying rural homebuyers. USDA loans are issued through the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program, by the United States Department of Agriculture.
The U.S. Department of Agriculture (USDA) home loans program offers mortgages to low-income residents of rural areas who cannot otherwise obtain a conventional mortgage.
If you live in a rural area and can't qualify for a conventional loan, you may be eligible for either a USDA guaranteed loan or a USDA direct loan. The home loans program is designed to help lower-income people living in unhealthy or unsafe rural conditions obtain a home with modern utilities and adequate space.
There are three USDA home loan programs:
USDA loans help make purchasing homes more affordable for those in qualifying rural areas. Though you'll still pay closing costs, if you're eligible, you'll likely get a lower interest rate and won't be required to make a down payment. You can do a preliminary check on the USDA eligibility site to see if the address of a home you're interested in and your income qualify. However, it's always best to let an expert help you understand your mortgage options.
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