The USDA Home Loan is a 100% No Money Down that has become extremely popular over the last 10 years. Outside of the VA Home Loan this is the only no money product available today.
There are other features that make this loan product attractive to home buyers. Credit scores as low as 620 are allowed. While there are consumer trade line requirements alternative trades can be used as well. Borrowers are requires to have 3 trade lines with a 12 month history reporting on their credit. Is these trades are not avail a credit history can be built using alternative trades such as rental history and utility bills.
The USDA Home Loan also allows the home seller to pay up to 6% of the sales price towards the buyers closing costs. In most cases this will cover most of the borrowers costs. This can be closing costs and pre-paids.
Individuals with prior bankruptcy and foreclosures can also buy a home using the USDA Loan. The requirement is they must be 3 years removed from these events. This is very close to the requirements set forth by the FHA Loan.
The only draw back to the USDA Loan is that a borrwer must buy in a qualifying area and cannot exceed the maximum household income for the area. The good news is that more areas qualify than those that do not. This easiest way to determine if a property qualifies is to use the USDA Eligibility Map.