Although it may not be as well known as the FHA, one of the most popular ways to get a zero down-payment mortgage is the USDA Guaranteed Loan. This loan is specific to rural areas. So if you are looking for a home with wide-open spaces in the country, you may want to consider this loan. The income requirements for the USDA Guaranteed Loan have changed this year, making it easier to qualify than ever.

Even if your desired locale doesn’t look all that “rural,” your location could still qualify. Roughly 70% of America could be categorized as “rural.” 

Use our USDA Mortgage Calculator to estimate home loan payments.

2017 USDA Loan Requirements

First and foremost, the home in question must be in a region that qualifies as rural, according to Rural Development. While the map does give a general guideline for what regions qualify, it isn’t set in stone. So be sure to check with Rural Development yourself.

The second major qualification is to make sure you are under the income limit. For example, in Grand Rapids, MI, a family of four, with two parents and two kids, needs to have a maximum income of $78,200 annually to qualify. Other parts of West Michigan may have different income levels, so be sure to check the USDA income calculator and with our mortgage specialists  to find out whether you qualify.

Lastly, the USDA Guaranteed Loan has other standard requirements including, the borrowers cannot own other real estate, minimum credit score, maximum debt to income ratios etc.

USDA Loan Benefits

Unlike the FHA Loan, you won’t have to pay private mortgage insurance (PMI) with the USDA Guaranteed Loan. That is a major benefit to this loan program. You will, however, have to pay a premium fee to help guarantee the loan. The good news is, the rate for the fee is significantly lower than the cost of PMI through an FHA Loan.

Additionally, The USDA Guaranteed Loan is much more lenient than other loans, making it the perfect option for first-time homebuyers, low-income earners, and those with lower credit scores. The USDA Guaranteed Loan requires no down payment for first-time homebuyers. It is also much more flexible than traditional loans with regards to credit, foreclosures, and bankruptcies.

Typically, a bankruptcy requires a 7-year period before a borrower can apply for a new loan and 4 years for a foreclosure. With a USDA Guaranteed Loan, a borrower only needs to wait 2 years after a foreclosure and 3 years after filing for bankruptcy before they can get approved for a home loan. Borrowers can qualify for a USDA Loan with a FICO score as low as 600.

Call Riverbank Finance at 1-800-555-2098 to schedule an appointment with a mortgage loan officer to find out whether the USDA Guaranteed Loan is the right fit for your financial needs.

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