Frequently Asked Questions
One of the biggest advantages of a USDA home loan is that you don’t need a down payment. If you live in a qualifying area and are a qualified borrower, then you don’t need a down payment. A down payment will help, though, reduce your monthly payments. Depending on the size of the down payment, could cut your monthly PMI.
The maximum limit of the loan for this program changes based on the median home prices in the relevant area. To learn more about the limits in your area, contact a mortgage consultant.
If your credit score is 640 or higher, you’ll receive a streamlined loan application process. For borrowers with a lower score or with no score at all, you’ll need to provide extra documentation such as: rental history, utility payment history, insurance payments, tuition payments, etc.
These documents are combined to establish a payment history or generate a credit score.
If you choose to not put a down payment on your home, you are required to pay two types of PMI. The Guarantee Fee is a one-time fee that equals 1% of the financed amount, which you can roll into the loan itself. The second type of PMI is an Annual Fee that will is broken into 12 payments that you pay with your monthly mortgage. This fee will decrease every year as you pay down the amount owed on your home.