A USDA Loan or a Rural Development Loan is a home loan insured by the government. This type offers 100% financing to qualified borrowers. To get approval for this loan, you must be a good payer. Borrowers who pay their bills in a timely fashion have good chances of getting approved. Income is also an important factor. You must submit documents proving that you have consistent income or you are employed. Your home must be located in a designated USDA rural area to qualify.

Like in VA Loan, in USDA, the Rural Development Office does not fund the mortgage loans. Rather, there are partner lenders who will loan the money with a repayment guarantee from the USDA, if ever the loan should default.

USDA Loan benefits

• No downpayment. A USDA Loan does not require borrowers to give a downpayment. This type also allows the borrowers to use a gift or grant to go toward the mortgage.

• Easier to meet credit guidelines. With a USDA Loan, borrowers still need to provide a credit history report, but the flexibility of the guidelines gives people with a spotty credit history a chance of approval.

The USDA Loan was originally designed to help Americans in rural areas realized their dream of owning a home. If the house you plan to buy is located in an eligible rural area, then take advantage of the USDA Loan.

The USDA Loan was originally designed to help Americans in rural areas realized their dream of owning a home. Take advantage of its benefits.