Where will your USDA home loan take you?

Buying a house in the city is expensive. How expensive? In 2021, the median home sale price for urban areas nationwide rose 15.9% to nearly $300k. It was the first time since March 2020 that home price growth in urban areas surpassed the prices in the suburbs or rural areas. Meanwhile, rural area price growth has been declining since October 2020.

If you’re a first-time home buyer struggling to break into the housing market in an urban area, why not consider moving out of the city? There are a lot of advantages, including a lower cost of living, lower housing prices, and access to USDA home loans.

Let us give you a quick refresher if you’ve never heard of a USDA home loan. A USDA home loan is a single-family guaranteed home loan designed for rural home buyers and secured by the US Department of Agriculture. To qualify, you must meet specific income eligibility requirements and be willing to live in a rural area. The program helps buyers find affordable mortgage options and increases the number of rural home buyers.

USDA home loans are a helpful mortgage tool for home buyers. These loans have low or no downpayment options (*closing costs and fees may still apply), and you can qualify even with a low credit score. It’s an affordable loan program for people with lower incomes, poor credit, or who may struggle to qualify for other mortgage financing options.

Of course, the downside is that you have to buy in a rural area. If you’re not sure about living a more rural lifestyle, here are some facts that may sway you.

• The Census Bureau recently updated its definition of rural areas to include under 50 000 residents. It used to be an area was considered urban if it had 2500 people! So, rural areas aren’t as small as they used to be!
• It’s cheaper to live in a rural area. Housing prices are lower, and the cost of living is too. In 2018, the average rural household spent $7808 less than an equivalent urban household. Typically, in rural areas, housing is about 30% cheaper!
• You’ll spend less on eating out and entertainment. Rural households have fewer dining options than urban households, so their food costs are 6% lower. They also save money on entertainment too!

There is no right answer to the ongoing debate over rural and urban life. Only you can decide which option is best for you. But if you are considering moving to the country, talk to one of our advisors about the benefits of a USDA home loan. It might just be the best mortgage option for you!