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Benefits of a Rural Development Loan

3 February 2010 71 Comments

The most obvious of all benefits is that no down payment is required. Borrowers who qualify for a USDA Rural Development home loan have the flexibility to pay nothing out of pocket for a down payment. That means a borrower can finance up to 100% of the appraised home value. Or, a borrower can have a gift or grant go toward a down payment with no money out of pocket.

The is no monthly mortgage insurance. Unlike other loan types, a  Rural Development home loan does not require the borrower to pay monthly mortgage insurance.

Low 30 year fixed interest rates. Since these loans are backed by the government the lender can offer rates as low as any other loan type.

Credit standards are much more relaxed compared to other loan types.  The individual lender may implement their own minimum standards but in general the USDA Home Loans are typically much more forgiving than other loan types when it comes to credit.

There is no maximum purchase amount. Again the lender may implement certain requirement’s that could limit the amount at some point but USDA does not have anything in place.

Fixer Uppers are OK. Believe it or not a borrower can finance in repairs on a Rural Development Mortgage. Its always best to consult with a realtor when searching for such a property though. You can even use a realtor who handels Little Rock Real Estate to help oyu with RD Loans.

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