In 1991 USDA (The United States Department of Agriculture) started offering loans for the development of rural and suburban areas to home buyers with low-to-average income for their area. They offer financing with no down payment, reduced mortgage insurance, and below-market mortgage rates.
USDA mortgage are offered for improving the economy of rural America.
USDA mortgage program is helping first time home buyers in Ohio who never thought they could do anything but rent due to their low income and absolutely no savings.
USDA loans are mainly for home borrowers who aren't wealthy and can’t get a traditional mortgage.
Some key features of USDA programs are as follows:
Done on a 200K loan
Loan guarantees: The USDA guarantees a mortgage issued by a participating local lender, allowing you to get mortgage without any down payment and that too at lower interest rates. If you put little or no money down, you will have to pay a mortgage insurance premium, though.
Direct loans: Issued by the USDA, these mortgages are for low- and very low-income applicants. Income thresholds vary by region. With subsidies, interest rates can be as low as 1%.
Home improvement loans and grants: These loans or outright financial awards permit homeowners to repair or upgrade their homes. Packages can also combine a loan and a grant, providing up to $27,500 in assistance.
Apart from home buyers eligibility, the property should also be in a location eligible for USDA loan. Metropolitan areas are excluded from eligible areas, nearby areas may qualify for the USDA program. If you are willing to go for USDA mortgage make sure to check the USDA eligibility of the property. One more thing as per USDA guidelines is that the property itself cannot be an income producing if you want to avail this program.
The best way to get started is by doing a home search from the list of properties and identify those that are in an eligible zone, these come with a special tag "In USDA Approved Zone".
Multi-unit houses will not qualify for a USDA loan. Moreover USDA mortgage cannot be availed for vacation homes, investment property or a property having a working farm.
With a USDA loan, you don't have to make a down payment. This is one of only two major loan programs (other being VA loan) that allows zero-down financing. Some of other benefits are listed below:
See available 'for sale homes' in your area with a local Real Estate Agent.
Talk to a mortgage expert and learn about all government programs in Ohio.