What Is A USDA Loan?

USDA loans are mortgages backed by the U.S. Department of Agriculture. They give home buyers access to 100% financing and low mortgage rates in suburban and rural neighborhoods.

May 14, 2020 by Dan Green

Moving somewhere that’s not “the city”?

It’s worth checking out the USDA mortgage, and that’s USDA as in the United States Department of Agriculture.

Yes, the USDA — the government agency best known for its work with farming, forestry, and food — also does work in housing. And its mortgage program is spectacular.

The loan is called the USDA loan (go figure) and it’s a no-money-down mortgage with government-assisted mortgage rates, which means you can get rates 0.5 percentage points below the interest rates you see for everything else.

And, that’s a big difference in your monthly payment.

Plus, USDA loans don’t require down payments,  which means you can borrow as little or as much as you need to buy that house you’ve been eyeing up – so long as that house is in a less-densely populated area.

That might include the outskirts of town, a college town, the suburbs, the far suburbs — really anywhere that’s not considered the city.

And 91% of the United States meets that definition, so if you’re thinking about homes in places that aren’t considered urban, remember that you could have access to rates lower than the general home buying population.

For questions about USDA loans and whether or not you’re eligible, reach out to us anytime.

Happy homebuying!

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