USDA home loans – Zero Down Payment Loans

USDA loans

USDA loans are offered by the federal government and are backed by the US Department of Agriculture. The USDA mortgages are designed with the aim of helping rural development which is why the qualification criteria for this loan program are very flexible.  The best feature of USDA home loans program is its zero down payments or no down payment requirement features. The USDA loan assesses an all over petty 2 percent mortgage fee on all loans and even this cost can be combined with the size of the loan at the time of closing. Apart from these costs, USDA loan can also cover other costs in the form of home repairs and improvements.  All these advantages as well as features are not available with other traditional loan programs.

Apart from the above mentioned advantages the USDA mortgages annual insurance is just 0.40% per annum and the size of the down payment large or small does not matter. Moreover, USDA loan comes with no limitation on the specific loan size, which means that the borrower can borrow more money with USDA loan as compared to traditional loan program.  The USDA programs are available to borrowers for 30 year fixed rate mortgages and are available with USDA streamline refinance program.

How to Qualify for Zero down USDA Loans

The major requirements to be eligible for this loan program are:

  • The house for which the loan is taking must be in a USDA-eligible area
  • The income of the applicant of the USDA loan may not exceed 115% of the area’s median income
  • The property for which the loan Is taken must be the principal residence of the borrower
  • The credit record of the borrower must be clean and decent
  • The borrower must be two years seasoned from a bankruptcy discharge