RURAL HOUSING LOAN

WHAT IS A RURAL HOUSING LOAN?

A rural housing loan, also known as a USDA loan, is backed by the U.S. Department of Agriculture and is designed to encourage homeownership in America’s more rural and remote locations. They’re ideal for low- and middle-income earners who may have difficulty obtaining other forms of financing.

RURAL HOUSING LOAN QUALIFICATIONS

Rural housing loans can only be used for owner-occupied, primary residences, so they cannot be used on rental or commercial properties. You’ll also need to buy a home in an eligible location and meet certain debt-to-income and employment requirements.

WHO SHOULD GET A RURAL HOUSING LOAN?

USDA loans are designed for buyers with low to moderate income. They’re also ideal if you:

  • USDA loans are designed for buyers with low to moderate income. They’re also ideal if you:
  • Need low up-front costs at closing
  • Are having a hard time securing funding through other means

PROS AND CONS OF RURAL HOUSING LOANS

PROS:

  • No down payment
  • No prepayment penalties
  • No limit on cash contributions
  • 100 percent financing

CONS:

  • Limited to certain geographic areas
  • Requires private mortgage insurance
  • Some income limits may exist
  • Limited to owner-occupied homes only
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