The United States Department of Agriculture administers the Rural Development loan program, a federally-insured mortgage loan available to both rural and suburban homebuyers who meet certain income-eligibility requirements. Eligible properties include new construction, relocation of an existing home, or rehabilitation of an existing home. The purpose of the program is to improve quality of life in rural areas by helping low and moderate-income families become homeowners.
How do USDA Loans Work?
The USDA makes mortgage guarantees to approved lenders, which enables them to take on the risks of lending to people with lower incomes or less-than-perfect credit and employment histories. USDA borrowers also pay low fixed interest rates and may be able to put no money down. As with FHA Loans, a “seller’s assist” to cover some or all of the closing costs is also permitted. And since you can borrow one hundred percent of the appraised cost with a USDA loan, if the sales price is lower you can use the extra funds to cover closing costs or repairs.
USDA loan borrowers who make a low down payment or none at all are required to pay mortgage insurance throughout the life of the loan, which is usually 30 years. This consists of a flat fee at closing as well as monthly payments included in the monthly mortgage payment.
Eligibility Requirements for USDA Loans
Both first-time buyers and previous homeowners can apply for a USDA loan as long as they meet income and location criteria. Visit the USDA official website to check your address for eligibility. Some suburban areas fall under the purview of the program, so homebuyers in Northern Virginia can apply as well as more rural residents. Income limits vary by location. As an approved USDA loan lender, TFB can help you determine the location and income criteria for your specific situation.
Contact a TFB USDA Mortgage Lender Today!
Since 1902, TFB has provided flexible and affordable home mortgage loans to Northern Virginia homebuyers. From Manassas and Haymarket in Prince William County, to The Plains and New Baltimore in Fauquier County and beyond, partner with your local USDA mortgage lenders. We offer friendly and personalized service as well as expertise in the local real estate market. Call our mortgage lenders today, visit your nearest TFB branch in Prince William or Fauquier Counties, or start an online application. We can’t wait to help you realize your dream of home ownership.