Are you dreaming of buying a home with no payment? If so, a USDA Rural Housing Loan could be perfect for you.
The goal of this program is to help low to moderate income families purchase a home in a rural area. Although properties within city limits do not qualify for USDA Rural Housing Loans, there are many surrounding areas that do. Applicants may build, rehabilitate, improve or relocate a dwelling in a USDA-eligible area.
USDA Loan Benefits
- Up to 100% financing
- Super low mortgage insurance rates
- Easier qualifications than most other loans
- Seller can make concessions to help closing costs
USDA Basic Requirements
- Credit score must be around 620 – 640
- Property to purchase must be in an eligible area: a rural location or town with a population under 20,000
- Steady job and income
- Income must be under the USDA income limits, which apply to the entire household
Loan Types
Who may apply?
Applicants for this program must:
- Meet income-eligibility
- Occupy the dwelling as their primary residence
- Be a U.S. Citizen, U.S. non-citizen national or Qualified Alien
- Have the legal capacity to incur the loan obligation
- Have not been suspended or debarred from participation in federal programs
- Demonstrate the willingness to meet credit obligations in a timely manner
- Purchase a property that meets all program criteria
What Colorado areas are eligible?
Click here to check what areas are eligible for USDA loans in Colorado.
How can you use the USDA loan?
Funds backed by loan guarantees be used for:
- Purchase or refinance a new or existing residential property to be used as a permanent residence. Closing cost and reasonable/customary expenses associated with the purchase may be included in the transaction
- Repairs and rehabilitation when associated with the purchase of an existing dwelling
- Refinancing of eligible loans
- Special design features or permanently installed equipment to accommodate a household member who has a physical disability
- Reasonable and customary connection fees, assessments or the pro rata installment cost for utilities such as water, sewer, electricity and gas for which the buyer is liable
- A pro rata share of real estate taxes that is due and payable on the property at the time of loan closing. Funds can be allowed for the establishment of escrow accounts for real estate taxes and/or hazard and flood insurance premiums
- Essential household equipment such as wall-to-wall carpeting, ovens, ranges, refrigerators, washers, dryers, heating and cooling equipment as long as the equipment is conveyed with the dwelling
- Purchasing and installing measures to promote energy efficiency (e.g. insulation, double-paned glass and solar panels)
- Installing fixed broadband service to the household as long as the equipment is conveyed with the dwelling
- Site preparation costs, including grading, foundation plantings, seeding or sod installation, trees, walks, fences and driveways