USDA loan program questions & answers- USDA-LOANS.COM

USDA Loan ProgramQuestions & Answers

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About The USDA Loan ProgramNot everyone has heard of the USDA Rural DevelopmentGuaranteed Housing Loan program- Also known as USDA Loans,Rural Housing Loans, or Section 502. The USDA loan programmay be available, but majority of mortgage lenders won’t offerthem. To be able to utilize a USDA loan you have to live or bebuying a home in a suburban or rural area. The USDA home loanis insured by the U.S. Department of Agriculture and is offeredwith zero money down financing and is available in 97% of thecountry. The USDA requires the borrower to pay mortgageinsurance. The guidelines for the USDA are pretty straightforward. Below are a few common questions and answerspertaining to the USDA Home Loan program.

USDA Home Loan ProgramQuestions and Answers

Q: How do I know if I’m eligible to usethe USDA Home Loan?

A: For borrowers to utilize the USDAHome Loan program, your home mustbe located in a suburban or rural area.Many smaller towns do meet the ruralstandards.

Q: What is the minimum downpayment for the USDA Home Loan?

A: The USDA Home Loan Programcan be financed 100% meaning thereis no money required to put down.

Q: What is the maximum amount Ican borrow?

A: The USDA Home Loan programdoesn’t have a maximum loan size, theamount you can borrow is determinedby your household debt to incomeratio and credit score.

Q: I’m a previous home owner, is theUSDA Home Loan program only for

first time home buyers?

A: Not at all, the USDA Home LoanProgram can be used by either a firsttime home buyer or a repeat buyer.

Q: Can the required mortgage insurancebe financed into my mortgage?

A: Of course! The USDA allows you tofinance your upfront mortgageinsurance payment into your loan.

Q: What if my lender doesn’t offerUSDA mortgages?

A: Not every lender offers the USDAHome Loan Program, luckily you canfind a lender who does by visiting TheU.S. Department of Agriculturewebsite, or you can find a lender righthere!

Q: How much are the Closing Costs?

A: The closing costs for the USDA HomeLoan Program will vary depending on yourlender and your location. Some lenders havehigh charges while other have extremely lowto none. Costs could be significantly higherin some states, but really low in other states.Since closing costs do vary be sure to shoparound to find the best lender and rates.

Q: What if I can’t afford the closingcosts?

A: The USDA will allow gifts fromfriends and family members.

Q: Can I negotiate to have the sellerpay my closing costs?

A: Sure can! The USDA Home LoanProgram permits the sellers to pay closingcosts for borrowers. This transaction isknown as a Seller Concession. **SellerConcessions may include all or some of thestate and local government fees, lendercosts, and the home/pest inspections**

Q: What if I want to use the USDALoan Program for a Vacation home

or investment property?

A: Unfortunately, the USDA Home LoanProgram can only be used for primaryresidences only.

Q: My credit score isn’t perfect, isthere a minimum credit score?

A: There is actually no minimum score,however your lender may require thatyou have a minimum credit score of atleast 640.

Q: I am self-employed, am I eligible touse the USDA Home Loan Program?

A: Absolutely! All you need is to providethe last 2 years of your federal taxreturns to verify your income.

Q: What if mortgage rates change,can I refinance?

A: Yup! USDA Home Loans areeligible to be refinanced.

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USDA loan program questions & answers- USDA-LOANS.COM

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