The United States Department of Agriculture (USDA) offers a loan program for rural borrowers who meet specific income requirements. The program is managed by the Rural Housing Service (RHS), which is part of the Department of Agriculture. 

Benefits of a USDA Loan:

  • 100% financing of purchase price
  • Seller may help cover closing fees
  • You might be able to roll the remaining closing fees into a monthly payment
  • USDA guarantee

Requirements for a USDA Loan:

  • The homebuyer's adjusted annual income cannot exceed 115% of the area median income, depending on the family size
  • Rates start with borrowers who have a minimum 640 FICO credit score
  • A single-family home that meets the rural location parameters

Another benefit of the USDA loan is it doesn't require private mortgage insurance, unlike other loan options (FHA has a monthly PMI fee to make up for the low down payment). It is important to know that a USDA loan requires two additional costs: you pay the first portion when you close on your loan, and the second is built into your mortgage payment once a year.

Did you know? The USDA defines a qualified "rural" area as any area with a population under 35,000.

To learn more about USDA loans and if this is the right option for you, contact us at 717-971-0025.

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