What is a USDA loan?
A USDA loan is a mortgage guaranteed by the U.S. Department of Agriculture that is available to rural and suburban homebuyers. USDA loans help lenders like Freedom Mortgage give low-to-moderate income families the opportunity to purchase or refinance a home in areas outside of metropolitan locations.
Our Loan Advisors can help you determine if you qualify for a USDA loan. When you choose Freedom Mortgage for your USDA loan, you will enjoy a simple lending experience. We will walk you through all the steps needed to get financing for your USDA loan. Call our Loan Advisors today at 877-220-5533.
Can you refinance a USDA loan?
If you currently have a USDA loan, you can apply for a USDA Streamline Refinance to lower your rate or improve your terms. Streamline refinances have less paperwork and documentation. There are no requirements for credit review, home appraisal, or home inspection.
You need to replace an existing USDA mortgage with a new USDA mortgage to be eligible for a streamline refinance. The house needs to be your primary residence, you need to be current on your payments, and your current loan needs to be 12 months old or greater. Finally the new loan amount cannot be larger than the original loan amount.
Freedom Mortgage can help determine if you qualify for a USDA streamline refinance so you can start saving money on your USDA loan.
USDA home loan benefits
A USDA loan can make homeownership more affordable for people who live in rural and suburban areas. Benefits of USDA loans include:
No down payment
Many borrowers can get 100% financing with a USDA loan, so they don’t have to worry about having a significant down payment. Government-backed USDA and VA loans are the only loans that offer the option of no down payment.
Competitive fixed interest rates
Since USDA loans are guaranteed by the U.S. government, lenders can offer competitive interest rates. Rates vary by lender and the rate you may be offered is affected by your credit score, finances, and other factors.
Affordable loan guarantee fees
USDA loans have an upfront guarantee fee which cannot exceed 3.5% of the initial loan amount and the annual fee cannot exceed 0.5% of the loan balance.
Flexible credit scores
There is no minimum credit score for USDA loans. Different lenders may have different requirements for credit scores they are willing to accept however.
No appraisal, income verification or lender fees if refinancing an existing USDA loan
If you already have a USDA loan, you can easily refinance to improve your rate or terms. With less paperwork needed, these loans can close faster than if it’s a new USDA loan.
USDA loan qualifications & eligibility
If you are interested in purchasing a home in a rural or suburban community, a USDA loan can help you realize the dream of owning a home. To be eligible for a USDA loan or USDA Streamline Refinance you need to:
- Be a U.S. citizen or permanent resident.
- 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 mortgage loans are intended for people with low to moderate incomes.
- Use the loan to purchase or refinance a primary residence.
- Be able to afford the housing payment including principle, interest, taxes, and insurance.
- Meet the standards for total debt.
Let Us Personalize Your USDA Home Loan
Freedom Mortgage can help personalize your USDA home loan. Whether you’re looking for a USDA mortgage loan or a refinance of a USDA loan, we’ll help you secure the best USDA loan rates and terms.
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