USDA Loans

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What is a USDA Home Loan

The USDA Rural Development home loan program is for first-time homebuyers and move-up buyers in Virginia. A USDA loan is a 100% home loan on a 30 year fixed rate with zero down payment required. USDA loans are for borrowers in USDA designated rural areas that are at or below the moderate income which is determined by the area the property is located. USDA is very broad on their definition of rural so many suburban areas in Virginia qualify for a USDA loan. To be eligible for a USDA loan, applicants must meet the basic eligibility requirements set forth by the USDA, which cover credit, income, property usage, and home location. Single-family homes, townhouses, and condos are all eligible for a USDA loan. USDA charges an upfront fee, which can be financed into the loan, and a monthly fee to guarantee the loan, this allows borrowers to get 100% loan on a 30 year fixed rate that is often lower than a conventional loan.

If you currently own a home you may still be eligible for a USDA loan. If your current home is going to be sold before closing on the new home then you may still be eligible for a USDA loan. We can help you determine if the home needs to be sold before you purchase your new home.

If your shopping for a USDA loan, we’d love to help; we offer USDA home loans in Virginia including Christiansburg, Radford, Marion, Abingdon, Wytheville, and the surrounding areas.

Benefits of a USDA Home Loan

100% Financed Mortgage, No Money Down

USDA Loans monthly mortgage insurance premiums are 41% lower than a comparable FHA Loan

USDA’s upfront fee is 57% lower than FHA

Flexible Credit Requirements

30 Year Fixed Rate Mortgage

No Maximum Loan Amount

With Seller Paid closing costs up to 6% of the sales, No Out-Of-Pocket Closing Costs

Easier credit qualifications

USDA property requirements

USDA’s goal is to provide safe and sanitary housing for low to moderate-income households. To meet this goal, USDA sets basic property requirements that protect homebuyers. The appraiser is assigned the responsibility to make sure the property meets these requirements.

The home must be used as the homebuyer’s primary residence

The site must have direct access to a street, road or driveway

The property must have adequate utilities and water and wastewater disposal

A USDA loan cannot be used to purchase an income-producing property.

Safety issues such as broken glass, exposed wires, 2 or more steps without handrails, and chipping paint must be corrected before closing.

Water and power must be functional

Example of a 100% Home Loan Payment

Based on a $150,000 Loan, 30 Year Fixed Rate of 4.5%

Principle and Interest $760

Home Owners Insurance $50

Real Estate Taxes $110

Mortgage Insurance $44

Total Monthly Payment $964

Do You Qualify for a USDA Loan in Virginia?

Some Key criteria you must meet in order to be eligible:

Must be below the income limit set by USDA, in most of Southwest Virginia the income limit is $82,700 for 1-4 household members and $109,150 for households of 5 or more.

The Property must be located in an eligible area, however, most homes in southwest Virginia are eligible for a USDA loan other than homes located in the cities of Bristol, Salem, Roanoke and the Town of Blacksburg.

The Property must meet USDA requirements.

620 or higher credit score.

Insufficient funds to pay a 20% down payment plus closing costs.

Must not own or you must sell any other homes, some exceptions apply.

With offices in Blacksburg, Marion, and Abingdon we provide home loans in Virginia including Christiansburg, Roanoke, Wytheville, Bristol, and the surrounding areas.

Apply Now for a USDA Loan

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