The Benefits of a USDA Guaranteed Loan to Purchase a Home

The U.S. Department of Agriculture (USDA) offers a guaranteed home loan program that helps people who want to buy homes in rural communities find lenders. The USDA will work with all qualified borrowers looking for homes in rural communities – not just first time homebuyers. The program requires NO money down. While the U.S. Department of Agriculture assists home buyers obtain a loan through easier qualifications and financing options than the traditional mortgage, they do not actually fund the loan. In all states, the USDA has partnered with a few lenders who provide the mortgages because of the repayment guaranty from the USDA. The guaranty means if the mortgage defaults, USDA pays it – which gives lenders more confidence to provide home loans to candidates they may not otherwise lend to, but who still meet the USDA underwriting guidelines and qualifications. For individuals and families looking for rural property within the state of Indiana – there is only one county in the entire state that does not qualify for USDA guaranteed home loans!

U.S. Department of Agriculture Home Loan Benefits

There are a number of benefits of using a USDA guaranteed loan to purchase your rural home, including:

· Borrowers can finance up to 100% of the appraised home value, and are not required to put a down payment on the home. The USDA guaranteed mortgage program is one of the few 100% financing options for home loans available.

· Borrowers can receive gifts or grants and use it toward closing costs.

· The US government guaranty's the loans which means lenders can offer lower interest rates on 30 year fixed home loans.

· Flexible guidelines that allows individuals with imperfect credit to qualify for home loans.

· No expensive mortgage insurance premiums (PMI – Private Mortgage Insurance) such as those required by the FHA guaranteed home mortgage programs.

· If purchasing a handyman special or homes that need repairs, you may qualify to include the cost of those repairs in the home loan mortgage.

· No maximum purchase price for home mortgages – the amount you can borrow will be based on your ability to repay.

Who is Eligible for an Indiana USDA Guaranteed Loan?

Any individual or couple looking to buy and live in a home that is located in a USDA eligible rural area can qualify for a USDA Rural Development mortgage, if income verification is sufficient. While you don't need to have a spotless credit history, you will need to show you have the ability and willingness to make your mortgage payments, yet be considered to have insufficient financial resources to qualify for a traditional home loan.

If you have previous foreclosures or bankruptcies on your record, they need to be at least 12 months old to qualify for a USDA mortgage.

In addition to the borrower meeting certain criteria for eligibility, the property itself must also be eligible for a USDA loan. Generally, to be considered a rural property, it will be located in open country and in a town with a population of less than 10,000 people.

You can determine if the property or location you are considering is considered USDA eligible by visiting http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do and reading under Property Eligibility for the type of property you hope to purchase.

How to Apply for a USDA Guaranteed Mortgage in Indiana

If you are interested in purchasing a home in a rural area, you will want to contact an approved lender. Visit www.lakewoodlendinggroup.com/usda to start the process of getting qualified for a USDA loan.