USDA Loans, backed by the US Department of Agriculture, are a great option for low to median income borrowers in suburban or rural areas. These loans allow borrowers to purchase a home for as little as 0 down, but there are some restrictions. USDA loans require that the home be a primary residence in a rural area, and the borrower cannot have an income of more than 15% above the local median.

Since these loans are backed by the Federal Government, they generally come with lower interest rates and more flexible credit guidelines. Like FHA loans, USDA loans come with both Upfront Mortgage Insurance of 1% and an Annual Mortgage Insurance Premium (MIP) but at a lower rate than FHA. Most lenders will also require a credit score of at least 640.

So, which areas qualify as “rural”? As it turns out, over 90% of the US is eligible. Click here for an eligibility map for more details!

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