If you’re buying a house somewhere that’s not in a city, you might be eligible for a no-down payment mortgage that comes with lower-than-average interest rates.
The loan is called the USDA mortgage. It’s named after its government sponsor, the U.S. Department of Agriculture, an agency usually linked to farms, farmers, and crops.
Don’t be fooled its name, though — USDA mortgages aren’t for farms! They’re for buyers and homes in cities, towns, and neighborhoods that are “less-densely populated”, where houses are modest and incomes are, too.
By USDA standards, 92 percent of the United States is USDA-eligible.
There are three main reasons to consider the USDA loan for your upcoming home purchase :
- You can buy a house without a down payment
- The interest rates are below market-averages
- Closing costs are lower as compared to other mortgage loans
And, on the topic of closing costs, home buyers using USDA mortgages are allowed to bolt on their costs to their loan so that no money is needed at closing whatsoever.
When you’re ready to narrow down your home search by neighborhood, use a USDA Eligibility Map to see whether your home and income might make you eligible.
It’s good to know all of your options. Your lender can help you choose.
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Home buyers snatched up properties for sale in May as housing made its v-shaped recovery.