USDA No Down Payment Home Loans

Over 50% of potential home buyers state that the one thing in their way of buying a home is the down payment requirements.

The United States Department of Agriculture (USDA) has a home loan programs that offers no down payment loans to qualified buyers.  This program is geared towards home buyers that want to purchase a home in a qualified rural area and have incomes in the low to moderate range.  Guideline can be found on the USDA web site.  In Middlesex County NJ we found homes in Spotswood, Monroe and South Brunswick that a home buyer could use USDA loan program to to purchase. Some homes in towns of Monmouth, Somerset and Mercer Counties also qualify for these loans. Some buyer may also qualify for a grant from the USDA to reduce the there mortgage payments if their incomes are too low. Loans from the USDA have low interest rates and lower mortgage insurance cost then FHA or Conventional loans.

Most real estate agents are not even aware that these loans exist. In addition not many lenders are familiar with these loan and because of that don't even offer the loans.  Wherever you may be are looking to purchase a home a good real estate agent can direct you to a loan officer that handles these USDA loans. Because of the loan and income limits the homes will be in the lower price range but for many first time homebuyers that's is exactly what they want and need.
The USDA determines which towns have housing that qualifies for these loans using a few different standards.  First is population. Fewer than 35,000 is the guideline.  However, the town most be rural in nature meaning not densely populated. The houses available most be modest in design, size and cost, must fit within the loan limits and not have any of the prohibited features as determined by the USDA. (see USDA web site)

We have been doing some investigating into how difficult it is for a first time homebuyer to actually get approved for an USDA loan and it is not as difficult as you might think.  The income limits are reasonable with the size of the family being taken into consideration.  Most of the modest homes in the approved towns will qualify for these loans.  Loans are available on Single Family and Mutli-family owner occupied properties.  You must plan on living in the home in order to qualify. No investment purchases are allowed.

In you are interested in finding out if you qualify or if the town you would like to purchase a home in qualifies go to the USDA web site or call our Century 21 office and speak with one of our Realtors.  We can put you in touch with a mortgage company that offers these USDA loans.