United States Department of Agriculture (USDA) loans are a perfect option for individuals with low income and struggling credit scores, giving people a chance to fulfill their dreams of buying a house. USDA loans are an attempt by the federal government to encourage buyers to buy properties in rural areas.
7 FAQs on USDA Loans Answered
FAQs on USDA Home loans.
Are there any area restrictions on USDA Loans?
Since USDA loans are intended primarily for rural areas, there are a lot of property restrictions. The areas approved under the USDA include rural areas and some suburban areas.
What is the importance of credit history in qualifying for a USDA Loan?
Although there are no exact specifications for your credit history, a good history will always increase your chances to qualify for the loan. However, in case of a USDA loan, lower than average credit scores may also apply.
Is it only for first-time homebuyers?
No, the loan is not restricted only for first-time homebuyers. However, you cannot take out an additional USDA loan, if you haven’t cleared your earlier mortgage loans.
What are the eligibility criteria for this type of loan?
Your monthly income should be within the described rate, though the loan is not necessarily intended only for low-income candidates. However, low income candidates have the most to benefit.
What is the maximum loan amount loan that can be borrowed?
The USDA loan does not have set standards for the amount that can be borrowed. The limit is usually determined on the basis of income and borrower-debt ratio.
What are the specific property restrictions?
You can buy condominiums, manufactured homes, and planned unit developments. However, you cannot buy the property for the purposes of making income.
Are these loans backed by the federal government?
These loans are backed by the USDA. They assure the amount to the lender in case of any default by the lender.
Drew Mortgage Associates is one of the leading mortgage lenders in the MA. They can analyze your financial information and choose a home loan program that will work within your budget.