Don’t Have Money for a Down Payment? USDA Loan is The Remedy!

If you are planning to buy a home but do not have the funds to make the minimum down payment required for a conventional mortgage, USDA loans represent a possible solution. USDA loans is a type of loan designed to help many rural and suburban homebuyers to realize their dream of homeownership in rural areas, or the outskirts of a city or mid-size town, as stipulated under the United States Department of Agriculture (USDA). The best feature of the loan is that borrower gets the loan without any down payment. In Texas as well as in many other parts of the US, this loan offers immense benefits to qualified borrowers looking to buy or refinance. Let’s take a look at the finer lines of the proposition.

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Key Facts about USDA Loans

The USDA Rural Development Office doesn’t directly fund the mortgage loan, it has rather partnered with selective lenders in respective state with a repayment guarantee from the USDA. The guarantee protects the interest of lender, if ever the loan should default.

The guarantee from USDA has enabled borrowers to provide highly attractive loan terms to USDA qualified candidates.

Eligibility Criteria

Any individual planning to buy a home located in one of the eligible property areas as stipulated under USDA guidelines qualifies for a USDA Rural Development home loan. In addition to this, the USDA loan applicant must provide adequate income proofs and a credit history to ensure the ability and readiness to meet repayment obligations.

Benefits of USDA Loans

Among the many benefits of USDA, below are some of the most important benefits for borrowers.

100 Percent Financing

100% financing mean no down payment. Borrowers who qualify for the USDA loan have the privilege to not to make pay anything in the form of down payment. In fact, the loan allows borrower to use a gift or grant to go towards their mortgage.

Competitive Fixed Interest Rates

According to the guidelines stipulated for USDA home loan by the U.S government, a lender can offer fixed interest rates to qualified borrowers. And since, 2014 the loan has been granted with 15 years fixed mortgage rate.

No Maximum Purchase Price

Although the USDA Rural Development Program has no maximum purchase limit, the lender may, however, impose some maximum amount of loan according to the paying capacity of the borrower.


USDA financing isn’t just for the rural areas with farms. The way USDA has defined ‘rural’, suburban neighbourhood also find place under its hood. Home buyers in qualified USDA locations and meet income eligibility requirements of the loan, can leverage the benefits of the loan that requires no down payment and comes with low mortgage rate.


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