USDA Loans

Video Transcription

Do you live in a rural area and are you looking for a home loan? Your solution may be a USDA Home Loan. The United States Department of Agriculture (or USDA) offers home loans to those who live in rural areas and earn low to moderate income.

So what are some other benefits of USDA Home Loans? 0% down for a fixed, 30-year home loan. The seller may contribute to the closing costs on a purchase or refinance. Get a gift or a grant toward a 30-year fixed-rate loan. There are no post-closing reserves needed. On Q takes pride in our Mortgages Simplified experience. Call your On Q Mortgage Consultant today!

See if a USDA Loan is right for you

What is a USDA Loan?

USDA home loans offer incredible benefits to borrowers looking to buy homes in rural areas. If you live in a small town or rural area approved by USDA Rural Development, you may be able to purchase a home with as low as 0% for a down payment.

USDA Loans

History of USDA Loans

The U.S. Department of Agriculture was created in the 1930’s during the New Deal. The USDA rural housing program was created because in the early 20th Century many homes didn’t’ have indoor plumbing, electricity, or any sort of good standard living conditions.

The U.S. Housing Act of 1949 declared every American deserves a “decent home and a suitable living environment.” Today, the USDA rural housing program has helped hundreds of thousands of families achieve their dreams of home ownership.

What are the eligibility requirements for a USDA loan?

USDA Loans are great for qualified home buyers in rural or suburb areas. Check out some of the qualifying factors for a USDA home loan below.

 

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FICO credit score of 620 or higher

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0% down payment

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Only available to eligible zip codes and areas

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And More!

Contact an On Q Mortgage Consultant today to see if a USDA home loan is right for you!

Are there income limits for USDA loans?

The USDA Loan Guarantee is meant for low-to-moderate income families and has income limits based on all household income and family size. Income limits differ by region. To check maximum income limits in your area, talk with your local On Q Mortgage Consultant.

Is my property eligible for a USDA loan?

In order to qualify for the USDA loan, your property must be in an eligible area. Most larger cities and metropolitan area homes are not eligible for USDA loans.

Call an On Q Mortgage Consultant to find out if your home is in a USDA eligible area.

What’s the difference between a USDA loan and a Conventional Loan?

There are plenty of differences between USDA loans and Conventional loans beginning with the down payment amount. USDA loans usually require little to no down payment where conventional loans may require anywhere from 3% to 20% down. USDA loans are more readily available to low to moderate income borrowers who live in rural areas where Conventional loans are often used for higher income borrowers in all areas. Take a look at the chart below for more common differences in various loan types.

 

USDA

Conventional

FHA

VA

Minimum credit score

620

620

580

600 with AUS approval

down payment

0%

From 3% to 20%

3.5%

0%

Loan Terms

30 years

10, 15, 20, or 30 years

15 or 30 years

15 or 30 years

Mortgage Insurance

Required

Required w/o 20% down

 

Required

 

Required

 

Who can Qualify?

Approved Rural Areas Only

Available to all

Available to all

Veterans Only

USDA Loans vs Conventional Loans vs FHA Loans vs VA Loans

 

What are the benefits of a USDA loan?

A USDA mortgage loan is a great option for a first or repeat home buyer that may have a lower income and/or a limited amount of money to put down. Some of the benefits include:

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0% down payment

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30 year fixed rate mortgages

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Purchase and refinance options for existing USDA Loans

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And much more!

Contact an On Q Mortgage Consultant today to see if a USDA home loan is right for you!

Is there loan limit for a USDA loan? 

USDA Home loan limits can vary based on the area. They will reflect the market in the surrounding area, which can be higher in real estate markets like California and Hawaii and lower in parts of rural America.

Contact an On Q Mortgage Consultant to learn if the USDA loan limit is different in your area.

What is the credit score requirement for a USDA Loan?

This mortgage program allows FICO scores as low as 620. If you are unsure of your FICO score, give us a call.

Contact an On Q Mortgage Consultant near you today to see if a USDA home loan is right for you!

Is Mortgage Insurance (MI) required for USDA Loans?

All USDA loans require mortgage insurance. The first premium charged is an upfront one-time payment mortgage insurance premium that is financed into the loan amount and usually totals around 1 % of the loan. The second is an annual mortgage insurance premium), which is paid monthly, and there which is .35% of the loan amount divided by 12. The MIP is divided into 12 installments and are part of your monthly mortgage payments. Check out our Loan Calculator below for the monthly breakdown of your mortgage with an USDA loan.

USDA Loans for First Time Home Buyers

USDA loans can be a great solution for First Time Home Buyers with lower incomes and could offer 0% down in rural areas. On Q Financial offers our On Time Closing Guarantee, Simplicity mobile app with our Mortgages Simplified technology, On Time Closing Guarantee, Multicultural Advantage, and more to help qualifying home buyers achieve their dreams of home ownership. Talk to your local On Q Mortgage Consultant to get started.

USDA Loans for Realtor Clients

On Q Financial works with you and your clients to find the best loan programs to match their needs and ensure that we’ll close on time.

We offer products and services to make sure your clients have the simplest mortgage experience with our Simplicity mobile app, On Time Closing Guarantee, Multicultural Advantage, quality service, and more.

USDA Loan Scenario

Loan example is based on a 30-year fixed USDA mortgage loan. Although down payment shown is 0%, additional funds may be due at closing. Amounts are based on a loan amount of $200,000, interest rate of 4.625%, APR of 5.318%, $3,057 due at closing and a monthly payment of $1,355.59. All amounts shown are estimates provided for educational and comparison purposes only and will vary for each loan. A USDA Guarantee fee will be charged and financed into the loan. The USDA Guarantee Fee is 1% of the loan amount and the USDA Annual Fee is 0.35%. The USDA Annual Fee is to be paid monthly as part of the mortgage payment. Income and geographic restrictions apply. Home-buyer education is required for this program. Program availability is subject to change without notice. This is not an offer for extension of credit or a commitment to lend. Additional restrictions may apply. On Q Financial, Inc. is an Equal Housing Lender. NMLS 5645 OnQ0722190681Y000005KPUl

See if a USDA Home Loan is right for you