What is a USDA Loan?
A USDA loan is a mortgage option available to rural and suburban homebuyers. Guaranteed by the U.S. Department of Agriculture, USDA loans enables lenders like Freedom Mortgage to provide low-to-moderate income families the opportunity to purchase or refinance a home in areas outside of metropolitan locations. Freedom Mortgage Loan Advisors can help you determine if you qualify for a USDA loan.
USDA Loan Benefits
A USDA loan makes homeownership attainable for those who may not be able to afford to buy a home otherwise. Here are some of the benefits of a USDA loan and USDA Streamline refinance:
- No down payment
- Competitive fixed interest rates
- Lower Private Mortgage Insurance (PMI) than a conventional mortgage
- Flexible credit scores
- No appraisal or income verification if refinancing an existing USDA loan
USDA Loan Eligibility
To be eligible for a USDA loan and USDA Streamline refinance you need to:
- Be a U.S. citizen, a U.S. non-citizen national or a qualified alien
- Live in a USDA determined eligible rural or suburban geographic area. Generally towns with a population of less than 20,000 qualify.
- Meet income eligibility limits set by the USDA. These loans are intended for low to moderate-incomes.
- Use the loan to purchase, build or refinance a primary residence.
- Be creditworthy. While the USDA doesn’t set a minimum credit score, lenders may impose their own credit requirements.
- Show a stable income with at least two years proof of income.
- Ensure total debt does not exceed 41% of your income.
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