How to Get a Low-Interest USDA Home Loan

How to Get a Low-Interest USDA Home Loan




Many people don’t already realize that the USDA (United States Department of Agriculture) Rural Development Branch offers low-interest home loans to low-income families. Because I am a single mother with a lot of children, I qualified for a subsidized loan. I am only paying a measly 1% interest on this loan! You will only qualify for this low of an interest rate if you are very low income. For people with higher incomes you can nevertheless get a low rate.

Also, keep in mind that the house or character needs to be “rural.” Now this doesn’t necessarily average that you need to live in the sticks. A friend of mine got a loan in Post Falls, Idaho, which has a population of about 30,000 and is only a 30 minute excursion from a major city.

Other benefits are that the homes are required to be no more than 10 years old. They will also finance land/home packages with (brand-new only) manufactured homes and land up to five acres. The will also complete an inspection of the home and character for you to make sure it is sound and meets codes.

Here is a list of steps to take to qualify yourself for a USDA-RD loan:

  • Go to the USDA income and character eligibility site and see if the home or character you are looking to buy qualifies as “rural,” and if you are within the income limitations.
  • Once you are sure that your income and location are eligible, go to the USDA site and look for the “office locater” link to find you local office. Contact them and ask to “prequalify.” They will send you prequalification form(s), and if you do prequalify, send to a loan application.
  • When filling out your forms, keep in mind that you can count child sustain and food stamps as part of your income. Quite often, there is a waiting list, so don’t procrastinate!
  • The rest of the time of action works pretty much like any other home loan. The USDA loan specialist you are working with will guide you by the time of action. You will be required to provide certain proofs of income and sometimes they require you to pay down your debt. They also can set you up for special assistance where no down payment is required.
  • Once you are officially qualified for a loan, it is time to find home or character. The USDA-RD will fund loans for acreage (up to five acres) and manufactured home packages (which is what I have). However, manufactured homes have to be brand new, so you can’t buy existing home/land set ups. Also, stick-built homes can’t be anymore than 10 years old.
  • So, what are you waiting for? If you have always dreamed of owning a home but haven’t been able to provide it because of without of income, here is your chance! USDA-RD loans are a great deal, and you can already get home improvement loans later on; in fact, I am getting a garage built on character this Spring with a USDA home improvement loan!



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