USDA loans are mortgage loans guaranteed by the U.S. Department of Agriculture. The program is officially known as the USDA Rural Development Guaranteed Housing Loan Program (Section 502 Loan). USDA loans are also known as ‘Rural Housing Loans’, however USDA loans can be used in many suburban areas as well - dependent upon eligibility.
USDA loans are popular among today’s home buyers because the USDA program offers no-money-down financing where homebuyers can finance 100% of a home’s purchase price and can also use when purchasing a modular home. USDA mortgage rates are typically lower than the rates for FHA, VA and Conventional mortgage rates and may offer reduced mortgage insurance rates to its borrowers.
Originally designed to help rural Americans realize the dream of homeownership, the USDA Mortgage now services a wide variety of locations, homes and properties through USDA approved lenders. The USDA Rural Development Single Family Housing Guaranteed Loan Program is one of the most powerful mortgage options available for rural and suburban homebuyers.
USDA Loans come with significant benefits that provide homebuyers the opportunity to achieve loan terms that no other program can offer. Of the many benefits, the most cited is the ability to obtain 100 percent financing.