USDA Rural Development Loans in Florida
Anyone living in the rural areas of Florida who are interested in owning a home should look into the USDA rural development program. The US Department of Agriculture is interested in developing these areas and have generated plans that may help you. If you thought ownership was out of reach, exploring this program could be very enlightening.
These special loans do not require large down payments. That is often the biggest detriment to some people who rent and would rather own a house and some land. Low interest is another feature of these programs that help new buyers. Lower interest can mean lower monthly payments. Some traditional mortgages require Private Mortgage Insurance which brings about extra monthly fees. This condition is waived in loans procured through the USDA rural development program.
We are here to help disentangle all the information and explain these programs to you in a clear, concise way. We want to help you get the financing you need to buy the home you are dreaming of in the Florida rural areas. Contact us to begin the process of exploring USDA Rural Development Loans in Florida.
What Is A USDA Loan?
The USDA home loan program is one of the best kept secrets in the home buying market today. This zero down, 100% financing home loan is sponsored by the United States Department of Agriculture to promote home-ownership in less dense communities across the United States. Therefore, it is often known as the USDA Rural Development Loan (RD Loan) or Rural Housing Loan.
The program is part of the larger Rural Housing Service under USDA’s umbrella of programs. But do not let the name fool you. It is not just for properties that are far removed from civilization.
In fact, a full 97% of U.S. land mass is eligible for USDA financing, representing 109 million people, about one-third of the U.S. population. USDA Rural Development Loans in Florida. NSH Mortgage has the wisdom and tools to help you understand that what a USDA loan can do for you.
How Do USDA Loans Work?
Getting a USDA loan program is not much different from getting a FHA loan or a conventional mortgage. Like FHA, a government agency sponsors the program, but local lenders handle 100% of the transaction. That means your lender does everything from taking your application to issuing the final approval.
USDA puts a final stamp of approval on the loan, and even that is handled by the lender. Here is how the USDA home loan process looks:
Apply → Get Pre-approved → Find a House → Full Lender Approval → Final Sign off by USDA → Close the Loan → Move in.
- Apply: You can find a lender that offers USDA financing. Most lenders in the U.S. can approve USDA home loans.
- Get Pre-approved: Your lender will look at your income, credit, and employment information. If you meet USDA home loan requirements, you will receive a pre-approval letter.
- Find a house: Use your pre-approval letter to make an offer on a USDA eligible home. Make sure the house is in a designated USDA area before making an offer.
- Full lender approval: The lender adds property information to your loan file, and does one last check.
- Final Sign off by USDA: The lender submits your full loan file to USDA for its seal of approval.
- Close the loan: You sign final paperwork. A few days later, the house is yours.
- Move in: You successfully completed your mortgage process. Now, enjoy your home.
USDA Home Loan Down Payment
The down payment requirement or lack thereof, is why so many buyers choose the USDA loan program. No down payment is required, making it one of the few 100% financing home loans available in today’s market. The only other widely available zero down loan is the VA mortgage, eligibility for which is gained by adequate military service.
For civilians, USDA loans are likely the only no down mortgage option. Following are minimum down payment requirements for all major loan types.
- Conventional loans: 3% down.
- FHA: 3.5% down.
- VA: 0% down.
- USDA: 0% down.
Down payment advantage: It would take years for many families to save 3% down or more. During that time, home prices can go up, which makes saving a down payment much harder. With USDA, home buyers can purchase immediately and take advantage of increasing home values.
Is A USDA Loan Right For Me?
USDA guaranteed loans are not right for every buyer. But, any first time or repeat buyer looking for homes outside major cities should check their eligibility for the program.
Here are a few advantages:
- Lower down payment than conventional or FHA financing.
- Lower mortgage insurance than conventional or FHA loans.
- More lenient credit score requirements than for conventional loans.
- Unlike VA loans, there is no military service requirement.
- The only zero down loan on the market besides the VA mortgage.
When USDA is not the right choice: If you want to buy a home close to the downtown core of a major city, USDA is not right for you. Additionally, if you have a high income for your area, or 20% down available, you will not qualify for USDA. This loan is reserved for those who need it most.