Rural housing loans (USDA loans) are backed by the United States Department of Agriculture. They enable homebuyers to purchase homes in less populated areas around the United States, in order to promote rural development. One-in-three Americans live in an area that qualifies for a USDA loan.
Because the loan is backed by the United States Department of Agriculture, there are immense advantages of USDA loans that most people can’t get with any other type of loan. Here are some of the benefits of USDA loans:
There are unique requirements for USDA loans. While the credit requirements for a USDA loan are incredibly relaxed, compared to other loan programs, there are specific areas across the country that are USDA-eligible. If your home or the home you hope to buy lies outside of a USDA approved area, then you are not eligible for a USDA loan. Pretty much any rural area in the country is going to be USDA-eligible. However, there are surprisingly some cities that are also USDA-eligible, due to the fact that they are classified as “rural in character.”
While the credit requirements for USDA loans are very relaxed, there are other specific requirements for USDA loans:
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