How to Qualify
Applying for the USDA loan program means meeting the program standards.
Buying a home in a USDA-eligible area affords you special down payment and credit requirements for your loan.
USDA HOME LOANS
USDA loans are backed by the U.S. Department of Agriculture as part of its USDA Rural Development Guaranteed Housing Loan program. USDA loans are available to low-to-moderate-income home buyers who are purchasing a home in a USDA-eligible area.
The USDA backing provides lenders a safety net in case the borrower defaults on the loan. Because of this decreased risk, USDA home loans offer 100% financing and low interest rates.
One of the most important benefits of a USDA loan is no down payment is required. This feature has helped many people access homeownership who otherwise would not have been able to purchase a home.
Applying for the USDA loan program means meeting the program standards.
Although borrowers are not required to make a down payment, they are responsible for a 1% guarantee fee that can be rolled into closing costs. Additionally, USDA home loans include a 0.35% annual mortgage insurance (MI) fee paid in monthly installments.
Here's an example: A home buyer who purchases a $100,000 home with nothing down would pay a $1,000 mortgage insurance premium as part of their closing costs, plus a monthly mortgage insurance payment of $29.17.
Compared to other loan programs, like FHA, USDA loan fees are relatively low, which makes them an attractive option for eligible borrowers, especially first-time home buyers.
Unlike other loan programs, USDA loans can only be issued by USDA-approved lenders. Our mortgage experts are experienced with USDA loans and can help make the process easy for you. Find a loan officer now to get started.
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