USDA Loans Florida
Why a USDA Loan?
There are many benefits, including: no down payment required; borrowers who qualify for a USDA Rural Development home loan have the flexibility to pay nothing out of pocket for a down payment. Additionally, the USDA Loan allows borrowers to use a gift or grant to go toward their mortgage.
A USDA Loan is a mortgage loan that is insured by the US Department of Agriculture and available to qualified individuals who are purchasing or refinancing their home loan in an area that is not considered a major metropolitan area by USDA.
Benefits of USDA Loans
- 100% Financing – you can buy a home with no money down. In some cases you can even finance your closing costs.
- You can refinance your home up to 100% of the value of your home.
- Low Fixed Rate Mortgage Options.
- They are usually easier to get because the Government insures the loan so that there is much less risk to the lender.
- They can be used for Existing Homes, Foreclosures or New Construction.
- Simple Loan Process.
- No Loan Limit. No Acreage Limit.
- There is No Prepayment Penalty.
- You can use the loan to repair or add on to your home.
- Flexible Credit Requirements.
Who is eligible for a USDA Loan?
Generally these loans are available to anyone who meets minimum credit guidelines and local area income requirements and is purchasing a home or refinancing their home in an area that is not considered a major metropolitan area by USDA.
Some common misconceptions of USDA Loans:
- They are just for farmers – USDA Loans are not “just for farmers,” millions of people from all walks of life already qualify.
- FHA or Conventional Loans are better – USDA Loans often offer better terms than an FHA or conventional loans.
- They aren’t flexible – Actually, USDA Home Loans can be used to buy a new home or refinance to a lower rate.
- Only certain people can qualify – Anyone who meets the income and credit guidelines can qualify for a USDA Home Loan.
- They are only for rural areas – Actually, USDA Loans are available in many areas that most people would not consider rural. For example, many small communities just outside of metropolitan areas qualify as rural areas according to the US Department of Agriculture.
- They are harder to get than FHA or Conventional Loans – This just isn’t true. In many cases USDA Loans are actually easier to get because the loans are guaranteed by the government.
The Lowdown on USDA Loans
Our USDA Loan Rates Are Low & Our Process is Quick & Painless
The United States Department of Agriculture (USDA) gives out a variety of loans to help low- or moderate-income people buy, repair or renovate a home in a rural area. Some of the popular types of loans are: the single family direct homeownership loan, the single family guaranteed homeownership loan, the rural repair and rehabilitation loan or grant and the mutual self-help loan. This guide will help you figure out what these loans are and whether you qualify.
Though the terms and details of these loans differ, all offer very low effective interest rates (some are as low as 1 percent) and don’t require a cash down payment. To qualify, you need to have a decent credit history.
We’re here to make the USDA home loan process a whole lot easier, with tools and expertise that will help guide you along the way, starting with our FREE USDA Loan Qualifier.
We’ll help you clearly see differences between loan programs, allowing you to choose the right one for you whether you’re a first-time home buyer or a seasoned investor.
The USDA Loan Process
Here’s how our home loan process works:
- Complete our simple USDA Loan Qualifier
- Receive options based on your unique criteria and scenario
- Compare mortgage interest rates and terms
- Choose the offer that best fits your needs
- Great for First-time Home Buyers
- 100% Financing (including Closing Costs)
- No Down Payment Requirements
- New Construction
- No Prepayment Penalties
- Low Rates
- Existing Homes
Real estate in Florida doesn’t begin and end with upscale condos in major cities. In fact, the vast majority of land in the state is considered rural and eligible for a USDA home loan. USDA home loans provide an affordable path to homeownership for anyone interested in buying outside of cities. Read on to see whether a USDA home loan is right for you.
What Is a USDA Home Mortgage Loan?
For more than 25 years, the U.S. Department of Agriculture has been administering USDA home loans as a way to rejuvenate rural America and make homeownership more accessible to low- to medium-income households. There are two main types of USDA home loans: direct and guaranteed.
- USDA direct loans are meant for low and very low-income applicants. They provide direct payment assistance to qualified applicants as a way to reduce mortgage payments.
- USDA guaranteed home loans are 30-year, fixed-rate mortgages backed by the U.S. Department of Agriculture. Government backing allows lenders to offer low interest rates and enables borrowers to put as little as zero money down. Applicants will need to locate a participating lender like radius financial group in order to take advantage of a USDA guaranteed loan.
It’s important to emphasize that these loans are not just for farmers. Any property located in a designated rural area is eligible. In this case, rural typically refers to counties with populations of 10,000 or less.
There are several benefits associated with USDA guaranteed home loans, including low interest rates, affordable mortgage insurance, and up to 100 percent financing, which means you can put zero money down with the purchase of mortgage insurance. The combination of these benefits can make homeownership achievable for many who might otherwise struggle to purchase a home.
Who Is Eligible for a USDA Home Loan in Florida?
In order to qualify for a USDA home loan, the property you’re interested in must be located in a designated rural area. You can check a property’s eligibility by looking up its location on the eligibility map.
Once you’ve determined that the property is located in a rural area, you need to make sure your household income doesn’t exceed the county income limit. The combined income of every adult in your household must not exceed 115 percent of the median household income in the area. To check the income limit in your area, you can refer to the USDA website.
Other eligibility requirements for USDA guaranteed home loans include:
- The property must be used as a primary residence.
- You must be a U.S. citizen.
- You should have a credit score of 640 or higher (some lenders may allow for lower scores with a higher down payment).
- Monthly debt payments must not be more than 31 percent of your monthly income, and debt payments plus your monthly mortgage payment must be below 43 percent of your monthly income.
There are no loan limits for USDA home loans, but borrowers are restricted by the income limit in their area.
Is a USDA Home Loan Right for You?
If you meet all of the above requirements, a USDA home loan might be a great way to achieve homeownership. For those who don’t have the savings for a large down payment but are interested in an eligible property, 100 percent financing can enable a home purchase right away. With a conventional loan, borrowers typically have to put a minimum of 3 percent down, which could be a significant amount of money depending on the home’s purchase price. And the down payment doesn’t include closing costs or other associated fees related to the home-buying process, which can quickly add up.
Of course, a major factor in determining whether a USDA home loan is right for you is your desired location. Do you need to be in or near a city for work? Or can you do your job remotely? Rural properties are great for remote workers, retirees, small business owners, farmers, or anyone who thrives in nature.
If you’re still unsure whether a USDA home loan is right for you, a loan officer would be happy to talk you through your options.