USDA Rural Home Loans and How They Work for You

To put it simply, as per current Branch Manager Mike Bergum, “USDA loans are loans backed through the Rural Housing Division of the U.S. Dept. of Agriculture and is the type of loan granted to millions of eligible primary potential individual home owners on the condition that they have low to moderate incomes or have inadequate funds for down payments.”

There Are Four Noteworthy Key Benefits You Need To Know:

As this is a type of loan that exists to assist low to moderate income individuals or families with inadequate funds for down payments, absolutely no down payment or “zero down payment” is required for USDA loans. Surprisingly, the rates are even quite competitive with current conventional loans. A thirty-year, fixed-rate loans and no pre-payment penalty are the standard for this loan type.
Although these loans are limited to areas classified as rural in nature, you might still find properties in some of the suburbs of major municipalities that qualify as rural. As long as the home is moderate in size and cost and meets local codes and regulations upon construction it might still fall under the “rural” category and may still be approved.

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Who then is qualified? Branch Manager Mike Bergum – long time mortgage veteran and lending expert, assures that any individual may be qualified to receive funds, even candidates who have had past credit issues with late pays, bankruptcies or foreclosure as long as it can be readily established that the borrower earns up to 115% of the area median income, is able to meet the scheduled payments and qualifies for the program requirements for approval. He further elaborates that this program is not for investment properties and that the main target is for primary occupancy mainly in approved rural areas.

Minimum cash is still needed to close though. But the good news is, the USDA Guarantee Fee and eligible closing costs may be financed. Gift money, grant money, and seller contributions are also accepted for maximum convenience.

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If you have questions or want to learn more about areas that meet the rural designation criteria, please don’t hesitate to reach out. Please visit or contact +1 6512484369 we’re most happy to help.