A United States Department of Agriculture (USDA) home loan is a zero-down payment mortgage for eligible rural and suburban homebuyers. USDA loans are issued through the USDA Rural Development Guaranteed Housing Loan Program. These loans are backed by the U.S. government and guarantee 90% of the value of a loan for approved lenders. This means that lenders can offer 100% financing on USDA-eligible homes while still taking on very little risk. The USDA Rural Development office operates over fifty financial assistance programs for a variety of rural applications. The program is designed to make it easier for people to purchase a property in a rural area. The purpose of this is to encourage buyers to populate parts of the country that are as-now underpopulated. However, the USDA decides if any given property is eligible for a USDA loan. USDA loans have similar requirements to FHA and VA loans. However, the USDA requirements change much more regularly. If a buyer is going to use the USDA program, the lender must know the most current requirements and make sure that the home will match them. Like the FHA and VA, the USDA also requires water tests for homes that are on a private well or a private water system. This is often the case with the rural properties the USDA covers.
HARD-TO-FINANCE PROPERTIES
There are certain types of properties that are more challenging to obtain a mortgage on than your traditional ranch in a nice suburb. We will turn our discussion here to review problem properties that are difficult to finance, going in order from easiest-to-finance to most-difficult-to-finance.
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