A great mortgage program you’ve never considered

Are you buying a farm? Many borrowers assume that they’re not eligible for a United States Department of Agriculture loan because they’re purchasing a home, not a 500-acre spread. But the USDA Single Family Housing Guaranteed Loan Program—note the “single family” part—makes it easier for buyers in certain areas of the country to afford a residential mortgage loan by encouraging purchases in those areas.

Who can borrow?
Your income must not exceed a certain threshold when compared to the median income in your area. That number varies depending on where you live and how many people are in your household. Also, you must live in the home.

Where can you buy?
The house must be in what the USDA considers a rural area, but the agency’s definition of “rural” stretches pretty far. For example, areas within 30 miles of some major metropolitan areas qualify.

What’s the interest rate?
USDA loans offer very attractive rates, often better than what’s available through FHA loans.

How much can you borrow?
There is no maximum loan amount. The size of the mortgage loan is determined by your credit score and debt-to-income ratio, among other factors. And there’s an option for no down payment—it can 100% financed.

What are the fees?
You do have to pay closing costs and a 2 percent upfront fee. Both of those costs can be rolled into the loan.

United States Department of Agriculture Single Family Housing Guaranteed loans aren’t for every buyer in every location. Visit the USDA’s website to see if the property you’re interested in qualifies, then talk to your lender about the other requirements.

Many people mistakenly think USDA loans are only for farms and ranches. Don’t overlook this very attractive mortgage loan product.