Rural Residential Loans

According to The Mortgage Reports, approximately 26 percent of the U.S. population lives in areas designated “rural” by the U.S. Department of Agriculture (USDA). With certain applicant requirements, these homes are eligible for rural residential loans that have numerous benefits over conventional loans. For instance, USDA loans allow 100% financing that require no down payment due to being insured by the U.S. Government. The program provides a 90% loan note guarantee to approved USDA lenders which reduces the risk of extending 100% loans to eligible buyers, thus allowing for lower mortgage rates than conventional loans typically.

These loans are a great option for buyers with moderate or low income, allowing homebuyers to purchase a house with little to nothing down and low mortgage rates — benefits that are only afforded by one other loan program (the VA loan).

Greendale Ag Lending offers two main rural home loan options:

  1. Rural home/hobby farm loans
  2. USDA 100% LTV loans

Eligibility

To qualify for these programs, the property must be located in an eligible rural area, and applicants must have moderate incomes or less (below 115 percent of AMI). Families must be without adequate housing, but able to afford the housing payments, including Principal, Interest, Taxes, and Insurance (PITI).

Other stipulations include:

  • Income – The loan considers total household income, even if someone in the household is not on the loan. (Income eligibility is determined by your state, number of household members, age of household members and the number of disabled household members.)
  • Applicant must personally occupy the home as their primary residence
  • Applicant must be a U.S. citizen, U.S. non-citizen national, or Qualified Alien
  • Suitable debt-to-income ratio (must be under 29 percent for housing and 41 percent total for those with FICO scores under 680).
  • Minimum credit score of 640.

Rural loans can be used by first-time buyers or repeat home buyers. USDA loan programs include a streamline refinance option for current USDA loan holders that dramatically simplifies the refinance process should the market present lower mortgage rates.

Greendale Ag can walk you through all the requirements and whether these loans are appropriate for your situation. Our mortgage experts put your specific needs at the forefront, and if a rural home loan is right for you, we will work to originate financing that many conventional lenders cannot or will not service. We offer highly competitive rates and a wide variety of term options designed to meet your needs.

Contact Greendale Ag Lending today to learn whether a rural home loan is right for you.

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