Not everyone is cut out to deal with the hustle and bustle of living in the city. Rush hour traffic, city lights polluting the nighttime sky and the always-on-the-go attitude doesn’t appeal to everyone. For those looking to escape the city life and settle down outside the city, the rural and suburban areas may be a perfect choice.
The United States Department of Agriculture offers the USDA Rural Development Single Family Housing Guarantee Loan Program, also known as the USDA Home Loan. This program is one of the most powerful home financing options available for families looking to become homeowners in eligible rural areas. The loan terms that are often achievable for homebuyers are far superior to those of many other types of loan programs out there.
Here are the several extremely attractive benefits that the USDA Home Loan program:
There are numerous benefits to provide homebuyers the opportunity of realizing their dreams of purchasing a home. Perhaps the biggest and most impressive benefit is the ability for homebuyers to obtain 100% financing, which means no out of pocket costs are required to purchase a home. The USDA Rural Development Office is not a lending institution but instead, the USDA has partnered with selected lenders from each state who will loan the money with a repayment guarantee from the USDA if the loan should ever default. This guarantee gives lenders confidence in borrowers, which allows the lenders to offer very attractive loan terms that borrowers would not find elsewhere.
No Down Payment
For those that qualify for the USDA Rural Home Loan program, have the ability to pay nothing out of pocket to purchase their home. No upfront costs make this loan option very attractive for those that may have struggled to generate enough savings to make a down payment for purchasing a home. In addition, the USDA Home Loan allows borrowers to use a gift or grant towards their mortgage. The USDA has eliminated the barrier of down payments that have kept so many potential homebuyers from being able to purchase a home.
Fixed Interest Rates
Because the lenders are backed with the USDA guarantee of repayment in the event of the mortgage defaulting, homeowners are offered very competitive fixed interest rates. Keeping rates low is just another one of the great features of this loan program. With terms of 15 and 30 years of fixed interest rates, families can enjoy lower monthly payments because of the lower rates offered.
Another great result of the USDA guaranteed repayment is that lenders are able to approve homebuyers that have less than great credit. Lenders are unafraid of the credit risk because of the USDA’s guarantee. Homebuyers must still provide a credit history but the requirements are far less strict than those that would come with trying to secure other means of financing. If borrowers do not have a great credit history, other sources of payment history can be used instead, such as bill payments and steady history of savings.
No Maximum Purchase Price
Unlike other loan programs available that set maximum purchase prices, the USDA Home Loan program has no maximum price limit. With that being said, the lender will still set a maximum amount for the loan that each applicant is eligible for based on his or her ability to repay. The loan amount limits are dictated by income and debt ratios and ultimately prevent the homebuyers from purchasing a home that is too expensive for them to afford, which keeps the default risk low.
For those looking for more information about the USDA Home Loan program and to find out if some of the best suburbs in Phoenix qualify, visit Nova Home Loans at https://www.novahomeloans.com/loan-info/our-loan-programs/usda/.