With all of the lending options available today, it is understandable that every borrower may not understand each and every type of loan. However, if you are located in any rural area around Birmingham, Alabama, one loan you should learn more about is the USDA loan. It could be a great way for you to borrow for the home of your dreams.
What is a USDA Loan?
A USDA home loan is a mortgage option that allows you to purchase with zero down payment. The loan is issued through the USDA (United States Department of Agriculture) and the program is properly known as the USDA Rural Development Guaranteed Housing Loan Program. Though these loans are more commonly known for being available in rural areas.
How Does the USDA Loan Work?
Surprisingly, a USDA loan is not much different than a conventional loan. Yes, the property will have to qualify for coverage, but when you find one that does, the borrowing process is much the same as it would be for any other type of loan. The USDA backs the loan, so there may be certain lender requirements (regarding the property and income/housing size considerations). However, there is no money down required—which can make it a very attractive option for some borrowers.
Who Qualifies for a USDA Loan?
The USDA is focused on helping those who have the greatest need. This means that it can be easier to qualify for this loan than many other standard loans, especially if the household income is on the low end. The exact borrowing requirements can vary from area to area and even property to property. Talk to your lender in Birmingham, Alabama to find out if you qualify.
If you would like to learn more about the USDA loan, you’re in luck! First Liberty Financial in Birmingham, Alabama is here to help! Contact us today.