USDA Loans: What are They and How Do You Know if You Can Qualify for One?

You may tend to think of the USDA as the government agency that stamps its approval on the steaks you buy in the grocery store, but did you know that they also have a mortgage assistance program?

If you haven’t heard of it, it’s really not a big surprise. The U.S. Department of Agriculture mortgage program is not all that well known, but if you don’t mind living in some of the more rural areas of Georgia, the program can save you some really big money.

What is the USDA Loan Program?

The USDA loan program, which is actually called the USDA Rural Development Guaranteed Housing Loan Program, is a zero-down payment mortgage program that is available for eligible homebuyers in rural and suburban areas.

The idea behind the program is that by encouraging people to move to more rural and less populated areas it can “improve the economy and quality of life for those who live in rural America.”

The plan allows those who are eligible to purchase a home with no down payment and a low interest rate. Although many people have not heard of this program, it may surprise you to learn just how accessible this program really is.

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How Do You Qualify for a USDA Loan?

Your ability to qualify is based on several different factors. There is also an income limit you have to meet. This amount varies by location and it also depends on size of your household.

Other criteria you must meet includes:

  • You must plan to live in the property you purchase (known as owner-occupied).
  • You must be a U.S. citizen or have permanent residency.
  • Have the ability to maintain a monthly mortgage payment that is 29 percent or less of your monthly income.
  • Cannot have other monthly debt that exceeds 41 percent of your income, however, you may still be able to get approved if you have a credit score that is above 680.
  • You must be able to show that you have had dependable income for a minimum of at least 24 months.
  • An acceptable credit history. If you have a credit rating of at least 640, you can receive streamlined processing. If it is less than 640 this doesn’t automatically disqualify you. You may be able to qualify, but you will face more stringent underwriting, or if you do not have a credit score, you may also still be able to qualify by showing your rental and utility payment history.

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Where Can You Find Eligible Home Locations?

Although most parts of the Atlanta area are excluded, there are certain areas in some of the more suburban parts of Metro Atlanta that qualify and rural areas are always considered eligible.

As an example, the western part of Paulding County is considered eligible and so are certain parts of Bartow and Polk County.

Are You Interested in Purchasing a Home Through The USDA Loan Program?

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While it is not impossible for you to find these types of properties on your own, the government doesn’t exactly make it easy for you to do. As a Realtor that is familiar with the Metro Atlanta area, however, I can help you to locate properties that will qualify for the USDA loan program and help make your search a whole lot easier.

Contact me at the information below and let me put my knowledge of the Metro Atlanta real estate market to work for you today.