USDA loans are a type of mortgage backed by the United States Department of Agriculture (USDA). They are designed to support rural housing development for low- to moderate-income individuals and families across the U.S. These government-backed loans offer a zero down payment option and can be used for purchasing, building, repairing, or refinancing a home in a rural area.
Types of USDA Loans
- Guaranteed Loan: This type of loan provides 100% financing for the purchase, build, rehabilitation, improvement, or relocation of a primary residence in a rural area.
- Direct Loan: Funded by the USDA, these loans are aimed at helping low- to very-low income borrowers obtain an affordable mortgage for a safe and sanitary house.
- Repair and Rehabilitation Loan: Also known as the Section 504 Home Repair Program, this loan offers funds to low-income homeowners for repairing or improving their homes.
- Rural Housing Site Loan: Available to private and public non-profit organizations to assist in purchasing a site and developing housing for low- or median-income families in rural areas.
USDA loans function by offering government-backed financing options to individuals and families, providing affordable homeownership opportunities in rural areas.
Guaranteed Loans: These loans provide a 90% loan note guarantee to approved lenders, reducing the financial risk and allowing lenders to offer 100% financing to eligible rural home buyers and owners. Direct Loans: Aimed at reducing mortgage payments for low- and very-low income households to help them obtain decent, safe, and sanitary housing. Repair Loans: Provide funds to very-low-income homeowners for repairing, improving, or modernizing their homes.
USDA loans are a great option for those looking to settle in rural areas. If you’re interested in exploring USDA loans further, reach out to a USDA-approved lender to see if you qualify for this beneficial program.
Source: Zillow
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Shirin Rezania Ramos | 858.345.0685 | www.shirinramos.com | Compass, DRE 0203379
