You may be able to access a low interest, no money down loan through the USDA.
For those of you who thought the USDA was only in the business of providing your beef with a stamp of approval, I have delightful news. The USDA also provides home loans to moderate and low income families through their Rural Development Program.
If you’re looking to buy a home in Sanpete County, Utah and have a modest income, you may qualify for a loan under this program. There are a few different types of loans, but I will be talking about the Single Family Housing Guaranteed Loan.
What is a USDA Guaranteed Loan?
To put it simply, a USDA Guaranteed loan is a loan that is guaranteed by the United States Department of Agriculture (USDA). The purpose of these loans is to make homeownership possible for people with low or moderate income levels, thereby supporting rural development.
Approved lenders are willing to provide these loans because the majority of the risk is assumed by the USDA. Of course, your family and your selected property must meet the program eligibility requirements before being approved. The great news is, you don’t need a down payment!
Note: The eligibility requirements are somewhat liberal, so don’t assume you won’t qualify before doing your research.
How To Qualify for a USDA Loan
As I mentioned above, both you and your selected home must meet the eligibility requirements. Because all of Sanpete County is considered a rural area, a home here will qualify according to current eligibility data. In addition:
- You must be purchasing a primary residence for you and your family. Investment property, rentals or vacation homes will not qualify.
- You must also be a U.S. citizen, national or Qualified Alien that has not been banned from using federal programs.
- You must be willing to pay the bills on time.
- You must meet the income requirements as listed here.
Note: The income limits are not as strict as is typical for government programs. The current limit for a family of four in Sanpete County is $75,650, according to the link above.
What Can I Do With the Loan?
The USDA Rural Development website provides a long list of items that you are allowed to pay for using loan funds. Some of those include a permanent residence, repairs and rehabilitation costs, utility connection fees and essential appliances. For the full list, click here.
Is It for You?
If you have a steady income, the ability to make housing payments, and meet the requirements of the program, I can see no reason not to consider a USDA loan. This is especially true if you have found it difficult to qualify for a traditional loan. It may be the answer you’ve been looking for.
Note: You must apply through an approved lender.
Like FHA loans, USDA loans provide homeownership opportunities to those who may not otherwise have access. If you are one of those people and have an interest in living in a rural area such as Sanpete County, you might want to consider this option.
Have you had experiences with this loan type in the past? Tell me about it in the comments.