Midland USDA Home Loans

To increase homeownership in rural America, the U.S. Department of Agriculture launched the Single-Family Housing Guaranteed Loan Program in 1991. The program expands the range of mortgage options available to low and moderate-income borrowers in rural areas who may not qualify for a conventional loan.

USDA home loans are issued by private lenders but are guaranteed by the agency if the borrower defaults. They come with desirable features and benefits, including:

• low-interest rates

• zero down payment

• repayment term of up to 38 years

Due to a lack of knowledge and numerous misconceptions about the loan, homebuyers rarely consider the USDA loan and therefore miss out on a potentially good route to homeownership.

Things You Need To Know About USDA Loans

If you’ve been turned down for a mortgage by conventional lenders in Midland because of your credit history or lack of sufficient income, you may be surprised to learn that the USDA home loan may be the solution you’re looking for.

We’ve listed some of the essential features and information about USDA-backed loans to help you decide if they are a good fit for you: 

     1. USDA loans are available to more than just farmers.

The words “USDA” and “rural” probably make you think of farms and rows of crops. Still, USDA loans are available to all qualified individuals who need help buying a primary home in a USDA-designated rural area. The good news is that “rural” by USDA standards often include suburban areas –  even homes in some mid-sized cities may be eligible. You can find out if a property is USDA loan eligible here.

     2. USDA-guaranteed loans do not require a down payment.

With a USDA loan, you can finance the entire price of the home, so you don’t have to make a down payment. In addition to your own money, the USDA will accept gift funds from family and friends for a down payment. It’s also possible to get help putting together a down payment through special programs.

     3. Mortgage insurance is mandatory but reasonably priced.

When you get a loan that doesn’t require a 20% down payment, you’ll have to pay for private mortgage insurance, which can significantly increase your monthly payment. USDA loans also require mortgage insurance to keep the program going, but at a much lower rate than most mortgages. 

     4. You can use the loan to finance different types of properties. 

The USDA loan gives you plenty of options for your new home. You can finance the following types of residential properties with a USDA-backed mortgage:

• Existing homes

• New Manufactured Homes

• New Construction Home

• Condominiums

• Modular Homes

• Planned Unit Developments (PUDs)

However, remember that the USDA home loan is limited to primary homes only. You cannot use it for investment properties or vacation homes.

     5. You can also use it to refinance your current mortgage.

The USDA also does refinancing with a few different programs: the USDA Streamlined-Assist, USDA Non-Streamlined, and USDA Streamlined Refinance. Among the 3, Streamlined Assist is the most popular because of its simplified process that requires no credit verification. On the other hand, the USDA loan does not offer a cash-out refinance as some other loan programs do. You may apply for a USDA loan if your gross monthly income exceeds 115% of your area’s median income. You can now get a USDA loan if your gross monthly income is no more than 115% of the median income in your area.  

Qualify for a USDA Loan in Midland, TX

Fortunately, the USDA loan is meant to be as affordable and accessible as possible, and so is our application process at Capital Home Mortgage. We follow a streamlined workflow, which allows us to close loans faster and provide excellent customer service.

The mortgage application process can seem daunting, especially for first-time homebuyers and those denied a mortgage loan. That is why we ensure our clients receive all the help they need.

Your hassle-free home-buying experience starts here. Contact Capital Home Mortgage today at (432) 218-4828!