The USDA loan is getting more attention these days.
Once an obscure program, it is now the loan of choice for home buyers that might have gone with FHA.
USDA might be the better deal.
Whereas FHA requires 3.5% down, USDA requires no down payment whatsoever.
Plus, mortgage insurance is cheaper and rates often lower.
But many home buyers wonder how these loans work. Do they have to find a government USDA office to apply?
Fortunately, getting a USDA loan is a lot like getting any other loan.Click to see your USDA loan eligibility (Sep 24th, 2017)
These loans are backed by the United States Department of Agriculture (hence the name) to promote economic development in less-dense areas of the U.S.hen people own
When people own homes, they purchase home-related goods and services and tend to stay in the neighborhood longer. Homeownership stabilizes the local economy and community.
But getting this government-sponsored loan doesn't mean you have to search out a government office to apply. Lenders around the country are endorsed by USDA to approve these loans.
If you can get an FHA loan or conventional financing at a certain lender, chances are it offers USDA as well.
Here's a brief overview of the process and how long each step takes:
To the applicant, getting a USDA loan will "feel" just like getting any other mortgage.
There is only one extra step in getting this loan compared to any other loan type. That is the extra check by a USDA office in your state. This is completely handled by your lender.
With an FHA, VA, or conventional loan, the lender can completely approve and close the loan on its own. USDA, however, requires a hands-on check by USDA staff.
The process can take an extra few days or up to three weeks or more depending on the backlog at your state's USDA office.
Check with your lender before agreeing to a closing date. The lender should know how long your local USDA department currently takes for final sign-off. Don't be unrealistic about your closing date.
Armed with a probable timeline, you can be a homeowner in a suburban or rural neighborhood with zero down and almost no extra hassle compared to any other loan type.
USDA loans are the best-kept secret in mortgage lending today. Those who discover it quickly realize that it's likely better than FHA or conventional.
The loan does come with income and geographic eligibility standards, though. The best way to get started is to get a USDA rate quote, which comes with a full eligibility check by a USDA lender.Click to see your USDA loan eligibility (Sep 24th, 2017)
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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2017 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)