The United States Department of Agriculture (USDA) offers a guaranteed loan program for single family housing. From USDA’s website, they explain that, “This program assists approved lenders in providing low-and-moderate-income households the opportunity to own adequate, modest, decent, safe, and sanitary dwellings as their primary residence in eligible rural areas. Eligible applicants may build a dwelling in an eligible rural area. The program provides a 90% loan note guarantee to approved lenders in order to reduce the risk of extending 100% loans to eligible rural homebuyers.” Here is a quick look at USDA loan benefits:
- No down payment required. Borrowers who qualify for a USDA Rural Development home loan have the flexibility to pay nothing out of pocket for a down payment. Additionally, the USDA loan allows borrowers to use a gift or grant to go toward their mortgage.
- Competitive 30-year fixed interest rates. With the guarantee of the U.S. government, a lender can offer competitive interest rates to qualified individuals and families. And, as of September 2014, the USDA will offer a 15-year fixed rate mortgage.
- Flexible credit guidelines. Borrowers must still provide a credit history report, but the flexible guidelines allow potential homeowners with spotty or bad credit to still qualify for a home loan.
- No maximum purchase price. The USDA Rural Development program has no maximum purchase price limit. However, a lender will still determine the maximum amount of loan each applicant is eligible for based on ability to pay.
Currently, the following Jagoe Homes communities qualify for these types of USDA loans: