I Want a USDA Home Loan - Where Do I Get One?

Mortgage and Lending with HomeTown Lenders

Lets start with the basics. There are two types of USDA Home Loans, USDA Guaranteed Loans and USDA Direct Loans.

USDA LoansThe Guaranteed Loan is made by banks and lenders who are approved to participate in the Single Family Housing Guaranteed Loan Program.

The terms are as follows:

Loans are fixed rate for 30 years
There is no required down payment
Reasonable credit applies (currently 640 middle score)
Debt to Income ratios will be used to determine repayment feasability
Income can not exceed 115% of the Median Area Income click here

For borrowers who are not able to qualify for the Guaranteed program,
the USDA Direct Loan may be the answer.

To qualify for this program the income must be very low to low income (see above link).

The terms are as follows:

Loans are fixed rate for up to 38 years
No required down payment
Unable to obtain credit elsewhere yet have reasonable credit history
The interest rate may be modified by a payment assistance subsidy.

Both programs require that the property must be located in a rural area that is eligible. Check eligibility here. In addition the following guidelines must be met:

Property must be modest in size and cost
Income property not eligible - this includes farm income
Land value can not exceed 30% of total appraised value
Manufactured housing - only if on permanent foundation and not a resale.

If you have questions about any of this call me (615) 895-4265

Comments (2)

Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

One of the best loan products in the market place. You shared wonderful information!

Nov 17, 2011 05:30 AM
Hal Tennant
HomeTown Lenders - Murfreesboro, TN
Get a Zero Down Mortgage - How to buy a home with no money down

I agree! I do more USDA loans than any other loan program that we offer.

Nov 17, 2011 11:51 AM