Two types of loans are considered 0% down: VA loans and USDA loans. I covered VA loans in my previous videos. Today, let’s talk about the USDA loan.
A USDA loan is a home loan insured by the United States Department of Agriculture. USDA Loans offer affordable 30-year terms with 100% financing. That means no money down! To be eligible for a USDA Loan, the home being purchased has to be located in an area deemed eligible by the USDA’s Rural Development Department. You can search areas through the USDA website. The website is not great, but you can get the idea.
You can find a map online by googling USDA properties. Mostly, you will find very small towns and communities, and if you are tired of the traffic and looking for small-town life, this loan can be a good option. Suppose you are looking around the LA area and Southern California. In that case, you will find Fillmore, Piru, Pine Mountain Club, some coastal towns between Ventura and Santa Barbara, and most mountain areas like Big Bear Lake.
Per USDA’s Rural Development guidelines, the program has household income caps. RD has segregated these restrictions per county. The income caps include total household income. Not just the persons on the loan but any person that will be residing in the residence. The average income cap for total household income is about $110,650 annually for a one to four-person household.
The income limit increases dramatically once you have more than five persons in the household. Areas with higher median area income will have higher limits.
The bottom line is that this loan is the exact reflection of its name, if you don’t mind the commute or work online and want to live in the mountains or in a small town that’s a good option backed by the US government.
Overall, it’s a process, and you will need some help figuring it out. Feel free to hit me up if you need more information.
