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- The USDA Home Loan is truly 100% no money down. It is only 1 of 2 loan types that has this feature. The other is the VA Home Loan
- The guarantee fee (same concept as mortgage insurance) is much lower than other loan types. Compared to the .85 FHA uses the USDA Loan uses a factor of .50
- Flexible credit requirements- The USDA Loan is very forgiving when it comes to credit standards. Alternative credit is even used in some cases.
- Seller paid closing costs. On a purchase transaction the seller is allowed to pay up to 6% of the sales price towards the borrowers pre-paids and closing costs. (Usually more than enough to cover everything)
- Competitive Rates- Interest rates are typically close to other loan types such as FHA and VA
- While the term rural is often associated with the loan it is very common to to see the loan used in areas just outside of major cities.
- Borrowers do not have to be first time home buyers to be eligible.
- Properties with extra acreage are acceptable
- No maximum loan amount
- Borrowers can afford more home for less compared to other loan types