First Time Home Buyer Federal Programs – USDA Loans
First Time Home Buyer Federal Programs – USDA Loans The US Department of Agriculture backs this loan program for first time home buyers. The loan is designed for the buyers with below average income and is one of the rare first time home buyer federal programs that provide 100 percent financing.
About USDA Mortgage: The loan program is also known as Rural Development Loan as it is limited to the properties in rural areas. An amazing fact about USDA is that almost 97 percent of the US geographic is in the territory of this loan program. USDA mortgage provides better mortgage rates than usual loan programs. That too, with zero down payment requirements
USDA Loan Rates vs FHA And Conventional Loans The loan programs gives borrowers the freedom to choose a neighborhood, time and the price range before buying a home. However, one thing that it does not allow you to choose freely is the mortgage rate. The mortgage rates are based on a special type of bond called MBS (Mortgage Backed Security). Once the price of the bond is set, your lender acts as a middleman between you and the MBS market and sets the final rates for your quote.
What Are The Advantages Of USDA Loan? • USDA offers zero down payment option to the buyers. • This loan program also accepts gift funds to go towards the mortgage • USDA is a 30-year fixed interest rate program with the guarantee of US government • From 2014, USDA are also offering a 15-year fixed mortgage for the first time home buyers • Borrowers are required to provide their credit report. However, the flexible guidelines allow the first time home buyers with bad credit to still qualify for the loan • USDA has no maximum purchase price limit. However, the maximum mortgage limit for a buyer is still determined by the lender, based on his ability to repay.
Eligibility Criteria Any legal US resident looking to buy a property in an eligible rural area can qualify for the loan. However, he must provide a credit history and income verification to prove that he can repay the mortgage.
Conclusion These are some of the highlights and benefits of one of the friendliest first time home buyer federal programs. If you are looking to buy a residence in a quiet, peaceful rural environment, USDA is the way to go.
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Sellect Realty LLC Marietta, Georgia. Visit: www.sellectrealty.com