What are USDA Mortgages?

Flower behind a fence in a rural area.

Looking to buy a home in the country? Maybe a USDA rural housing loan could help.

USDA rural housing loans are low to no money down mortgage products designed for home buyers in rural communities throughout the United States. USDA rural housing loans are only available in areas deemed eligible by the US Department of Agriculture (USDA). USDA home loan programs also have income requirements which must meet certain criteria. Unlike many conventional loan programs, making too much money may impact one’s ability to qualify as USDA mortgage programs are geared toward lower and middle income borrowers. USDA’s web site provides a tool where you can research a property by its address to see if it is in an area that qualifies. You may be surprised to find the some areas which you may view as non-rural are eligible.

USDA Rural Housing Loan Highlights (Subject to Change).

  • USDA financing for up to 100% of the appraised value or sales price of the home – whichever one is lower.
  • Unlike most low money down mortgage programs, there is no Private Mortgage Insurance (PMI).
  • Seller closing cost assistance may apply.
  • Home buyers must be US citizens, qualified aliens, legally admitted to the US for permanent residence.
  • Property must be used as borrower’s primary place of residence.

List of some companies offering USDA financing and/or other low money down alternatives:

  • American Financial Resources is a national mortgage lender headquartered in Parsippany, New Jersey that offers USDA mortgage programs throughout much of the United States. They are also one of the country’s leading FHA mortgage lenders which may be a solid option for borrowers in both rural and more urban communities. You can reach an AFR mortgage consultant by calling 800-316-9508 to discuss your 100% home loan financing needs. NMLS#2826
  • While American Bank does not offer USDA rural housing loans at this time, they do provide VA loan and FHA mortgage programs around the Nation. FHA loans require 3.5% down while VA loans can offer a no money down mortgage option. To speak with someone at American Bank, dial 877-215-2290.