A USDA loan is a government insured purchase loan that is offered only in rural areas. Under the terms of the program a person may borrow up to 100% of the appraised value of the home; which eliminates the need for a downpayment. In other words this loan requires no downpayment.
USDA loans are not only for farmers. Anyone looking to purchase a home in a rural area outside of a major metropolitian area may qualify for a USDA loan.
What does the USDA consider rural?
Rural areas , are open country and places with a population of 10,000 or less people.
What is the maximum loan amount?
There is no set maximum loan amont; however your debt-to-income ratios will determine how much you can quality for and your total household Income will be taken into consideration.
You can also finance closing cost into the loan.
* note: effective October 1st 2011, USDA loans will start charging a monthly MIP(mortgage insurance) fee.
Remember that USDA loans are area specific, so if you are a Brooklynite looking to buy real estate in an upstate New York county rural area or any rural area in the country, this maybe an ideal loan option for you.
Since interest rate are low now maybe the time to buy that rural home that you always wanted.
Speak to your lender regarding this option, do your research , or contact a lender who specializes in this type of loan.
When you are ready to buy or sell real estate in Brooklyn , feel free to contact me at 917-861-9166.
Michele Cadogan
Fillmore Real Estate
Licensed Real Estate Associate Broker
Cadogan's Brooklyn Real Estate blog 