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How to Get USDA Rural Development Loans

If you want to own a home in a rural area, a USDA Rural Development loan may be the answer you are looking for. There are a variety of loan options, including guaranteed loans and direct loans. You might be able to borrow up to 100% of the home’s purchase price, which means that no down payment is required in some cases! To get a USDA Rural Development loan, follow these steps.

Determine Your Eligibility

USDA Rural Development loans are intended for prospective homeowners that have a low or moderate income. Rural Housing Guaranteed Loans are for applicants with up to 115% of the median income of the area they live in. You can learn about the median income in your area at the USDA Rural Development site. These loans are for families that do not have reliable housing but that can afford the cost of homeownership.

Rural Housing Direct Loans, also called Section 502 loans, are intended more for low-income homebuyers. To be able to get this loan, your income must be 80% or lower when compared to the area median income. Loans are for either 33 or 38 years; applicants with very low incomes can get 38 year mortgage terms. Houses purchased with these loans must be relatively modest in terms of size, design, and cost.

It is important to consult the USDA Rural Development website to learn the exact eligibility requirements for your specific area. This will help you determine whether or not you can get a USDA loan.

Apply At Your Selected Lender

Different USDA Rural Development loans have different lender requirements. However, the majority of programs allow you to work with any lender you choose. Since the process of applying for and securing a USDA Rural Development loan is considerably different than that of a traditional mortgage, you may want to select a lender that has specialized knowledge with USDA Rural Development Loans.

Provide the Necessary Paperwork

Since USDA Rural Development loans are backed by the government, they require a considerable amount of paperwork over and above what is required for traditional mortgages. Make sure to keep good records of income, debt, and other financial or employment information. You will be expected to provide this information throughout the loan process, so keep records until you close on your home. Stay in regular contact with your loan officer so that no unnecessary delays are caused by a lack of necessary paperwork. For more loan information, visit www.myloanadvisor.com.

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