USDA loans, also known as Rural Development loans, offer a unique opportunity for homebuyers to secure financing in rural and suburban areas. These loans are backed by the United States Department of Agriculture (USDA) and are designed to make homeownership more accessible in less densely populated regions. Here are some key features and considerations for USDA loans:
- Contract Duration: Typically 30 to 35 days from offer acceptance to closing.
- Credit Score Requirements: Minimum credit score of 550 is accepted, but best results are seen with a score of 640 and above.
- Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
- Income Restrictions: Eligibility is subject to household income limits, ensuring support for low and moderate-income families.
- Rural Eligibility: USDA loans are primarily intended for properties located in rural and suburban areas. While the definition of “rural” can vary by location, many homes in smaller towns and communities are eligible.
- Compensation: Both lender and Borrower paid compensation