USDA Home Loan

You may be eligible for a no down payment loan through the USDA home loan program if you meet income guidelines and buy in a designated rural area.

USDA home loans, sometimes called rural development loans, are government-insured mortgages that help buyers purchase a home with no down payment. Buyers may finance their closing costs into their loan or receive seller assistance for minimal out-of-pocket costs. USDA mortgages usually have very low fixed-interest rates.

The USDA home loan program was created in 1991 to improve homeownership rates in rural areas, although not all areas covered by the loan are necessarily rural. The program allows for purchases, refinances, renovations and repairs.

Benefits of a USDA Home Loan

• 100 percent financing available with no down payment. The only other major mortgage program that offers this is the VA program.
• Closing costs may be financed.
• Credit requirements are more lenient than conventional mortgages.
• Borrowers with prior credit issues, including prior bankruptcy or foreclosure may qualify.
• Low, competitive fixed-interest rates.
• Designed for lower-income borrowers.