The Benefits to USDA Loans
If you live in a small town or rural area situated in a location approved by USDA Rural Development, you may be able to purchase with up to 100% financing. There is an opportunity to use grants and gift funds in some locations, and you may still qualify even if you have low to moderate income.
What are the Benefits of USDA Home Loans?
- Up to 100% financing on a fixed 30-year loan, based on the appraised value of the home
- Closing costs may be contributed by the seller on a purchase or included in the loan on a refinance
- Gifts or grants permitted on 30 year fixed-rate in some locations
- No first-time homebuyer restrictions
- No post-closing reserves required
Refinancing is also available on your existing USDA home loan and some of your closing costs would be allowed to be rolled into your loan amount.
USDA Refinance Benefits
- Allowed on existing GRH
- Rate reduction only; no cash-out
- New interest rate is at minimum 1% lower than loan current note rate
- Max loan amount is based on total amount due from payoff; less unpaid late charges, other ineligible fees, and lender credits; standard closing costs.
- Mortgage history is verified. The last 12 months must be 0 x 30
- Employment verification: Borrower(s) must be employed or have alternate sources of income (i.e. fixed income) Verify Household income falls within Guaranteed Rural Housing Program Income Limits
- Verify no borrowers have been removed from original loan (unless deceased)
- No appraisal required and no max DTI
- FICO requirement is 640
On Q Financial takes pride in providing a “Mortgages Simplified” experience to homebuyers in our small towns and rural communities. Contact an On Q Mortgage Consultant for more information, or visit the USDA Rural Development website for additional information on USDA Home Loans.
Disclaimer: For Guaranteed Home loans Only