If you’re looking to buy or build your first home in a rural or suburban area in Minnesota, but you’re having trouble with your finances, a USDA loan might be just what you need.
It will help you get the right mortgage without breaking the bank so that you can have your dream home before you know it.
USDA loans are designed for borrowers with lower incomes who can’t get approved for a conventional loan. The US Department of Agriculture issues them through its loan program that aims to improve the economy in rural America.
These home loans have very low-interest rates and don’t require a down payment and mortgage insurance. They have a 100% LTV (loan-to-value) ratio.
There are three types of USDA loans:
Guaranteed loans are issued by private lenders but backed by the USDA. They’re tailored for borrowers with low-to-moderate income. However, they require mortgage insurance if a borrower puts little to no down payment.
Direct loans are issued directly by the USDA, and they’re designed for borrowers with very low income.
USDA home improvement loans are for borrowers with very low incomes who want to renovate their homes.
Conventional loans aren’t issued by the federal government, which is why their application requirements are very strict.
You need to have a higher income and a higher credit score to be eligible to apply, and you need to make a down payment.
If you make a down payment of less than 20% of a conventional loan, you would also need to get private mortgage insurance. That’s simply because these loans aren’t insured by the government, which is why they incur higher interest rates than USDA loans.
To be eligible to apply for a USDA loan in Minnesota, you must meet the following criteria:
Your income will set the maximum limit of your loan, so that’s the only variable factor.
If you want to get a USDA loan through a private lender, GO Mortgage is here for you. We can walk you through the whole process and speed things up so that you can enjoy your dream home faster than you may have imagined.
We have a team of mortgage experts who specialize in USDA Minnesota loans, so we promise you’ll be in the most capable hands. Contact us today to find out how we can help!