Tuesday, July 5, 2011

Just in

Purchasing Your Idaho Home with a USDA Loan
by Kevin Pearia
Boise--Idaho is almost synonymous with farming as when most people think of Idaho they think of potatoes, and for many rural residents farming is their livelihood.The USDA Home Loan has long been known as the “farmer’s loan,” yet many farmers don’t even know the USDA Home Loan program exists.

Affording the purchase of a home isn’t always possible – especially for those like farmers who can expect to pay premium sales prices for premium land. The typical conventional loan requires that an interested borrower provide a down payment of at least 20 percent in order to secure financing, and not every interested homeowner can afford that. To help make homeownership more affordable and accessible to those seeking rural living,the United States Department of Agriculture developed the USDA Home Loan Program.

What is the USDA Home Loan Program?

The USDA Home Loan Program was established by the United States Department of Agriculture’s Department of Rural Development to provide 100% government guaranteed mortgage loans to those interested in purchasing rural real estate. The best cater to rural residents, the USDA Home Loan program distributes two types of mortgage loans, the Guaranteed Loan and the Direct Loan for lower income households.

Why Choose a USDA Loan?

Unlike most conventional loans, USDA loans offer a variety of benefits which can save a prospective farm owner thousands in up-front, out-of-pocket expenses. Not only are borrowers able to purchase a home with zero money down which alone can save a buyer tens of thousands of dollars, but they are also able to attain several other benefits exclusive to the USDA Home Loan which will also save them money including:

  • No mortgage insurance

  • High loan limits

  • Low, fixed interest rates

  • High debt-to-income ratios allowed
Who is Eligible for a USDA Loan?

Although the focus of the USDA home loan program is to alleviate the financial burden purchasing a home can often place on a family, it also desires to make homeownership more accessible by enforcing lenient eligibility requirements. Nearly all homes in Idaho qualify under the USDA Home Loan Program, and for an Idaho resident to become eligible for the program, he or she simply must:

  • Be living in a home that is currently inadequate for the family’s needs

  • Be able to afford the monthly payments of the new home
The USDA home loan program does have some of the most lenient eligibility requirements in the lending industry; however, most USDA-approved lenders will require a mid-range credit score of at least 620 to secure financing. Even potential applicants with imperfect credit histories are still encouraged to apply for a USDA loan, as even those who have been a victim of bankruptcy or foreclosure have been approved in the past.

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