What’s the best USDA Rural Home Loan, the Guaranteed USDA Rural Home Loan or the USDA Direct Loan?

It’s important to note that the USDA Rural Home Loans are gaining enormous popularity in Michigan.  Primarily because it allows home buyers in qualifying areas to purchase a home with absolutely zero down payment and without the added expense of monthly mortgage insurance.  In most cases, the USDA Rural Home Loan is the least expensive loan to obtain and to maintain. There are two types of USDA Rural Home Loans;

1. Guaranteed USDA Rural Home Loan
2. USDA Direct Home Loan

Let’s look at the Guaranteed USDA Rural Home Loan first.  It allows you to buy in a rural designated area and has a higher income limitation than the USDA Direct loan.  It allows for applicants to have a Qualifying Income of up to 115% of the area median household income.  All of our Guaranteed USDA Rural Home Loans are based on 30 year fixed rate loans that carry similar interest rates to a FHA home loan.

The USDA Direct Loan is not as common as the Guaranteed USDA Rural Home Loan.  One reason is that they carry very strict income limitations for qualifying applicants.  You must have a low income (80% of the area median household income) in order to qualify.  Applicants also must be without adequate housing and be able to afford the housing payment including taxes and insurance, which can be up to 26% of the applicant’s monthly income.

As a local provider of these great loan programs, I have been able to help many clients in Michigan get into a home with out any out of pocket costs at all.  With 100% Financing, plus seller concessions to cover your closing costs and pre-paids, you actually buy your new home with absolutely zero money down!  This program is available in nearly 90% of Michigan so when you are done looking at all the information I have provided here on my site, give me a call to see if you qualify, or click on “secure online application” and I will promptly process it and get back to you.