These are up to 100% financing (zero-down) loans for eligible borrowers in “rural areas” according to the USDA maps. They are backed by the U.S. Department of Agriculture (USDA), and carry additional limitations on eligibility based on the location of the property, and income of the borrowers. Here’s why you’d consider a USDA loan:
- Down payment grant is essentially money that comes in the form of a grant, which can be used for down payment and/or closing costs. This is obviously fantastic for borrowers who don’t have enough assets of their own, and/or can’t get a gift from family.
- FHA, VA, or Conventional loans are eligible for this loan. While DPA guidelines have a few more restrictions, they basically follow similar requirements of the loan type being underwritten. So sellers can pay for the same % of closing costs as the loan type, too.
- Possibility of closing with $0.00 is a real opportunity, depending on the price point and other factors. Expect to have to spend some money (like home inspection and appraisal), and even some assets needed at closing…but it’s very possible you bring $0.00 to closing.
