The United States Department of Agriculture offers a loan scheme that helps potential homebuyers afford their dream home and benefit from perks that are quite unheard of with conventional loan programs. The USDA or the United States Agricultural Guaranteed Rural Development Loan is a loan program that enables home buyers to buy a home without a down payment requirement. Curious about this incredible loan program? Here are some of the key benefits of USDA loans in Colorado:
- Zero down payment – The loan program provides homebuyers 100% financing. First time as well as repeat homebuyers are eligible to apply for the loan program. In many cases, first-time home buyers find it difficult to meet down payment requirements—the USDA eliminates this hurdle by providing 100% financing without down payment for homebuyers.
- Lower interest rates – USDA loans are insured by the Department of Agriculture, which means that borrowers are offered much lower interest rates, across the board—an amount that doesn’t vary based on the borrower’s credit score or they down payment, which is often the case with conventional financing.
- Lower PMI or private mortgage insurance rate – PMI is required for loans with less than 80% loan-to-value. A borrower under the USDA program is offered the lowest private mortgage insurance rate compared to any loan program available in the market.
- Flexibility in terms of credit guidelines – As a government-backed loan, the USDA allows borrowers with limited or blemished credit histories to get better chances at home financing. With the USDA, lenders are more willing to accept alternate tradelines like cell phone bills, rent, utilities, and other such poofs to represent payment history should your credit history fall short.
There are many other benefits to considering a USDA loan in Colorado. However, it is important to remember that loans are still subject to eligibility requirements, which is why it pays speaking with a mortgage adviser when seeking out the best loan option for your home financing.