The USDA 0% down home loan might be the right loan for you if you make enough money to afford a monthly mortgage payment but you don’t have a savings account with necessary funds for 3% or more down. This is the only loan of its kind that is guaranteed by the U.S. Department of Agriculture so the loan is less risky for investors. The lower risk factor allows for lower rates and mortgage insurance, so your monthly mortgage payment will stay lower than comparable loan programs.
You may also want to consider the USDA 0% home loan if your credit score is under 640. USDA is one of the only loan programs that allows borrowers with credit scores as low as 620. The Underwriter will evaluate your credit and you will likely meet the requirements unless you have delinquent federal debt, more than one 30+ day late payment over the previous 12 months, an outstanding judgement, an account turned over to collections within the last 12 months, or a bankruptcy or foreclosure within the last 3 years. You will need to have 2 current lines of credit on your report that have been maintained over a 12-month period. Alternate forms of credit may be considered. These credit requirements are much more lenient than comparable loan programs.
The USDA 0% down home loan is a great option if you’re looking to purchase a home outside major city limits or in a rural community. The 0% down home loan is only valid on homes that are in USDA-determined rural areas. Around 97% of the U.S. falls within these areas, so finding an eligible home is easy. In fact, USDA’s website has a search option to help you determine whether or not a home is eligible. Also, this loan program has no limit on home price.
You can get the 0% down home loan if you’re a first-time homebuyer or if you’ve purchased a home in the past. As long as you meet all other criteria, you may be eligible for this home loan. Since the 0% home loan was created to assist lower-income families with buying a home, you will need to verify that your income doesn’t exceed USDA’s guidelines. They are determined by your geographical area and number of people in your household. If your income qualifies you for the 0% down home loan, you may want to choose this program over another not only because it requires 0% down, but also because the mandatory mortgage insurance is usually lower.
There are many reasons why a potential homebuyer should look into the USDA 0% down home loan. It saves you money up front and gives low-income families the opportunity to buy their own homes. People with flawed credit histories or limited credit are also not excluded, unlike with other loan programs. Mortgage insurance rates are low despite having no down payment, and it helps develop our rural communities.