A USDA home loan is a great way to get into a home, particularly for low-income individuals. Backed by the US Department of Agriculture, the USDA home loan is part of the Rural Development program, which promotes homeownership in smaller communities. If you don’t have a down payment, you may qualify. There are several benefits to this 주택담보대출 type of loan. Read on to learn more. Moreover, you can even get one without a credit check or income verification.
Low down payment
To qualify for a USDA home loan, you must be at least 51 percent below the median income. However, there are some special requirements for USDA loans, too. The loan must be for your primary residence, and your income must be below the USDA’s low-income limit to be approved. You must also be a U.S. citizen or qualified alien to be eligible. Lastly, you must own the property and plan to live there permanently. If you do not meet any of these requirements, you may qualify for a Federal Housing Authority loan instead.
Flexible credit score requirements
The eligibility of a USDA home loan is dependent upon your credit score. Although lenders do not impose a specific https://www.thirstypilgrim.com/angel-food-cake/credit score requirement, most do require a minimum credit score. However, lenders may override those minimums if you have compensating factors. For example, if you do not have a credit history, you may be able to qualify with a score as low as 620. These new standards went into effect in December 2014, but USDA lenders were still requiring a credit score of 640 before.
No mortgage insurance required
If you don’t put 20% down on your new home, you may be wondering if USDA home loans require mortgage insurance. USDA home loans come with a one-time 1% guarantee fee at the time of closing, and an annual 0.35% fee that you can roll into your loan amount. These fees are not required, but they are recommended for those with lower credit scores. The upfront guarantee fee is rolled into the loan amount, so that it’s easier to manage.
Interest rates lower than conventional loans
A USDA home loan interest rate is lower than the average mortgage rate for a traditional home loan. This is due to the government backing of the loan, which means you don’t have to put down a significant amount of money. Although you must still pay the closing costs, you won’t have to pay a down payment. However, there are many benefits to applying for a USDA home loan. Here are some of the benefits you may not know about.
Requirements for applying
There are some general requirements for a USDA home loan. First, applicants must have a clean credit history, which lenders check using the Credit Alert Interactive Verification Reporting System. Additionally, borrowers must have completed a homeownership course approved by the USDA. Moreover, first-time homebuyers must also repay the subsidy when they sell the home. Lastly, the USDA looks into the household income, and looks for a stable employment history.