Are you interested in purchasing a home that is located in a suburban or rural area? USDA mortgages are offered through the United States Department of Agriculture and provide excellent benefits for borrowers who purchase a home in certain less-populated areas. If you are looking at purchasing a home outside the city limits in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, contact Foundation Mortgage today. Our loan specialists can work closely with you to determine your unique home financing needs.
What Is a USDA Loan?
A USDA loan is a low interest mortgage financing option with a zero down payment available for eligible suburban and rural home buyers. USDA loans are non-conventional loans insured through the government, (via the USDA Rural Development Guaranteed Housing Loan Program), and were created to help borrowers with lower incomes or lower credit scores that may not ordinarily qualify for a traditional loan obtain a home loan. Because the loans are backed by the government, lenders can offer a USDA loan to borrowers who may have less than ideal credit because the USDA can cover a portion of the loan in the event that a borrower is unable to make payments. A USDA loan can help you finance the construction of a new home, buy an older home, or purchase a recently built home.
There are several benefits to obtaining a USDA loan. First of all, a down payment is not required, and you can secure low loan costs and interest rates. Additionally, the rates for private mortgage insurance, (PMI), on a USDA loan are lower than average, plus, there are options to finance PMI into your monthly payments. Another advantage to USDA loans is that even if your credit rating is less than stellar, you can still qualify.
USDA Loan Requirements
Eligibility requirements for a USDA loan vary depending on location, income levels, and size of the household. USDA loan requirements typically include:
- You must be a legal U.S. citizen or permanent legal resident
- You must have a credit score of 640 or higher
- You must live in the home as your primary residence and it must be located in a qualified rural/suburban area
- You must be able to prove your income and demonstrate the ability to pay back the loan
Secure a USDA Loan Today
If you are interested in buying a home in a qualifying rural or suburban location near Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and need home financing to assist you in the process, a USDA loan could be a helpful option for you. Contact the loan specialists at Foundation Mortgage to get assistance understanding the best financing option for you.