What Are USDA Home Loans?

USDA home loans are loans backed by the government. They are insured by the United States Department of Agriculture and are used to promote rural development for families with low to moderate income. The USDA has more lenient guidelines than obtaining a mortgage from the bank. You must be a United States citizen in order to qualify and every county has different income guidelines. You must have a long standing employment history and the ability to repay the loan.


The loans are offered for single family homes in areas where the town population is under 10,000 residents. The loan can be for an existing structure or new construction. The mortgage can equal up to 102 percent of the value. The USDA only offers 30 year fixed mortgages. The interest rates are in  line with market rates. Usually, there is no money required for down and closing costs and they can be financed into the loan. There are loans that are great products for low income families who are trying to buy a home with no money down.

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