The surge in new home sales and construction has led to a growing number of properties eligible for USDA mortgages. USDA (United States Department of Agriculture) mortgage loans are tailored to assist homebuyers in rural and suburban areas. Developers often target these regions due to the lower land acquisition costs. This program has many benefits for potential buyers.
The main benefits of a USDA mortgage include:
No Down Payment Requirement:
– One of the most significant advantages of a USDA mortgage is that it typically allows borrowers to purchase a home without making a down payment. This can be particularly beneficial for individuals or families who may not have substantial savings for a down payment.
Low Interest Rates:
– USDA loans often come with competitive interest rates, making homeownership more affordable for qualified borrowers.
Flexible Credit Requirements:
– USDA loans may be more lenient when it comes to credit requirements compared to some other types of mortgages. This can be helpful for individuals who may not have perfect credit but still meet the eligibility criteria.
Income Eligibility:
– USDA loans are designed to assist low to moderate-income households. To be eligible, applicants must meet income limits based on their location and family size. This makes it a viable option for those with moderate incomes.
Guaranteed and Direct Loans:
– The USDA offers both guaranteed and direct loan programs. Guaranteed loans are provided by private lenders but backed by the USDA, while direct loans are issued directly by the USDA. This flexibility allows borrowers to choose the option that best suits their needs.
No Private Mortgage Insurance (PMI):
– USDA doesn’t have mortgage insurance. Instead, they have an annual fee included in the monthly payment. This is much less when compared to the PMI (Private Mortgage Insurance) accompanied by Conventional or FHA mortgages. This can contribute to lower monthly payments.
Property Eligibility
– USDA loans are specifically intended for homes in rural and some suburban areas. This can be advantageous for individuals looking to purchase homes in eligible locations.
It’s important to note that USDA loans have specific eligibility requirements and geographic restrictions. To determine your eligibility and explore the benefits further, contact Andy Schoemehl at 314-221-7797 today.
Andy Schoemehl | Vice President
314.221.7797 phone | 636.898.1017 fax
[email protected]
aschoemehl.gershman.com
NMLS #258507
16253 Swingley Ridge Rd, Suite 200
Chesterfield, MO 63017
