The US Department of Agriculture and has established the USDA mortgage loan program which encourages economic growth in developing rural areas by making homes more affordable for the average American. Homebuyers are enticed to relocate by this program’s more lenient loan conditions, competitive nationally monitored rates, and no required down payment. Unlike other loan programs which require credit scores upward of 640, the USDA Rural Development Loan permits borrowers with a minimum credit score of 620. This is especially appealing to first time homebuyers whose credit history may not be as strong as those who have previously owned a property, as well as borrowers who don’t have the equity from a sold home to use as a down payment. Additionally, USDA allows up to four borrowers on a loan, and they are not all required to have a credit score if at least one borrower meets the minimum requirements. This is beneficial to lower income households with strict budgets and to borrowers who can contribute financially but who haven’t yet established a credit profile. This loan program is valid for new, existing, and foreclosed homes. Through USDA, borrowers who have had a past bankruptcy are also eligible two years after they have been discharged and foreclosures are overlooked after three years. With a reliable employment and banking history, homeownership can become a reality for many who believed they didn’t qualify. USDA also has refinancing options for those who have owned their home for at least a year and wish to either change their terms or cash out on their equity. In some cases, a new appraisal and inspection may not even be required.
The USDA mortgage loan is valid only on homes in USDA-defined rural areas. Typically rural areas are considered to be open country, but USDA-defined rural areas are often on the outskirts of major cities, in small suburban communities, and in areas with less than 25,000 residents. Information about qualifying areas can easily be obtained through USDA’s website.
USDA is committed to continuing the support and improvement of rural developments. New communities of homebuyers necessitate the creation of countless jobs in order to thrive. With new homes there is the need for plumbing and other city works, electricity, telephone and television providers, shopping, restaurants, and schools. Also, people who own their homes are more likely to expand their families and be involved in their local communities, thus fueling the economy’s progression and securing the future. The USDA mortgage loan provides Americans the opportunity to afford a home and help to grow and strengthen our economy.