4.USDA Loans
You may be eligible for a USDA mortgage if you aren’t purchasing in a major metropolitan area. The United States Department of Agriculture (USDA) program, formally known as the Single-Family Housing Guaranteed programme , was established to assist borrowers with moderate and low incomes in purchasing homes in rural areas.
No down payment is required when using a USDA loan to purchase a home. You can get a loan from the USDA, but you have to live in a rural region (which is more common than you may think). The USDA’s eligibility maps will tell you if the area in which the property you want to buy is located is considered rural and if your household income is within the acceptable range for that area.
It’s possible that your regular payments will decrease, too. That’s because USDA loan rates tend to be cheaper than FHA or conforming loan rates, and interest rates are often lower as well.
USDA financing comes in two different forms.
Buyers with incomes up to 115% of the Area Median Income (AMI) are eligible for the Guaranteed Program.
Standard USDA-guaranteed loans are available from many mainstream lenders, while the Direct Program is aimed for persons with incomes of 50% to 80% of the AMI. However, participants in the Direct program must coordinate their efforts directly with the USDA.
A credit score of 640 or above is usually required to be approved for financing.