USDA LOANS
A USDA Home Loan from the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program, is a mortgage loan offered to rural property owners by the United States Department of Agriculture.
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A USDA Home Loan from the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program, is a mortgage loan offered to rural property owners by the United States Department of Agriculture.
USDA-backed loans may offer eligible buyers in qualifying rural areas a purchase option without a required down payment. Closing costs and program fees may still apply, and income, property and underwriting requirements must be met.
USDA loans have specific eligibility requirements and are not available to everyone. Eligibility for another loan program does not, by itself, determine USDA eligibility.
If you’re not eligible for any other program, though, the USDA is a great solution for homeownership in Colorado.
Like all other government-backed loans including the FHA and VA loans, the USDA doesn’t underwrite your loans. You secure the loan from a USDA-approved lender. The USDA has the final say in whether or not you get approved, though, as you must meet the USDA requirements.
Lenders are able to provide the 100 percent financing because of the USDA guarantee. If a borrower defaults, the USDA pays the lender back a portion of the lost funds.
USDA guaranteed loans generally include upfront and annual guarantee fees. Ask your lender for current fees and compare the full cost with other options.
USDA loan qualification starts with eligibility for the program. The USDA started the program for families that couldn’t secure funding any other way. Today USDA loans are for:
In addition, the home you purchase must be located in a rural area according to the USDA guidelines. Looking at the USDA map, though, you may see other areas that aren’t necessarily rural and are even considered suburban, giving you a chance to secure 100 percent financing on the home.
Eligible USDA buyers may have options without a required down payment, but closing costs and guarantee fees may apply. Rates vary by lender and borrower; compare APR and total costs with other available loans.
USDA loans are only available as a fixed-rate option, which is great for homebuyers on a fixed income because you don’t have to worry about fluctuating payments.
Let me help you determine if you’re a good candidate for a USDA loan. If you can’t secure financing in any other program, you meet the qualifying requirements, and will buy a home in a rural area of Colorado, you may be a great candidate for the loan.
