![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Every year, the U.S. government invests $15 billion to $20 billion through the USDA Office of Rural Development to help families buy and improve their homes and increase the quality of life in rural America. Similar to VA and FHA loans, USDA Rural Development loans offer zero-down payment mortgages for those who qualify. These loans are issued through local mortgage lenders and backed by the U.S. government and are meant to benefit those who may not be able to qualify for a loan through traditional means.
Could a USDA loan be right for you? Here are some commonly asked questions about the Rural Development loan program and their answers.
Q: How do USDA loans differ from traditional loans?
A: USDA Rural Development offers no-money-down mortgages, whereas traditional mortgages tend to require approximately 20% down. Though you will still need to pay mortgage insurance if you do not put down at least 20%, this program is ideal for families that do not have enough money in savings for a down payment.
Q: Do I have to live in the home?
A: USDA loans are only for those who will live in the home as their primary residence. You cannot get a USDA loan for a home you plan to rent out for income, use as a second home, or buy for a child or another person in your family.
Q: Do I need a job to qualify for a USDA loan?
A: Yes. To qualify for a USDA loan, you must have reliable income and show that you have had steady work for at least a 24-month period. U.S. Citizen, Permanent Resident Aliens, and Non-Permanent Resident Aliens are eligible borrowers, with valid documentation of residency status.
Q: Do I need good credit to qualify for a USDA loan?
A: An acceptable credit history is necessary to obtain a USDA loan. USDA loans offer more flexibility than conventional financing for borrowers who have experienced prior credit issues, when they have corrected the issues and maintained acceptable payment patterns for the recent 12 months. The minimum credit score is 620, but for borrowers with a 640 or higher, USDA loans may offer expanded qualifying parameters, allowing more applicants to realize the dream of homeownership.
Q: How do I know what qualifies as rural area for a USDA loan?
A: Check out the USDA map for eligibility here.
Q: How do I apply for a USDA loan?
A: Contact Mortgage Investors Group, the #1 USDA mortgage lender in Tennessee (2014, 2015). You can start your application for a USDA loan with this simple form
Do you have more questions? Hop on a call with our mortgage experts to help, 865-268-8571.
