USDA Loans Texas – the Best Loan Solution for Low-to-Moderate Income Group
Texas is a dream destination for those who want to live close to nature. Especially the rural areas in Texas provide many opportunities for people who wish to move to a place far away from all the hustle-bustle of the urban vicinities.
If you are looking to move to any rural area in Texas or already live there and want to invest in real estate, this article will provide all the right information you need to get started.
In this article, we will talk about USDA Loans Dallas, TX, what they are, how they work, and more.
What are USDA Loans Dallas, TX?
USDA loans are designed to facilitate low-to-moderate-income group home buyers who wish to invest in rural properties in Texas.
To help low-income borrowers in rural areas buy their own homes in Texas, USDA works with lenders to offer guaranteed loans that come with excellent interest rates and zero down payment requirements.
How do they work?
The USDA, also known as The U.S. Department of Agriculture, offers several types of guaranteed loans to buyers who want to buy or repair a property in a rural area in Texas.
The sole purpose of these loans is to facilitate buyers who otherwise cannot invest in expensive properties or continue to live in their current homes due to deteriorating property conditions.
Types of USDA Loans
The most common types of USDA loans include:
Section 502 Direct Loans: With this type of loan, buyers can buy an existing home, repair it, or even build a new home from scratch. You don’t even have to pay any down payment or mortgage insurance. All you have to pay is a fixed interest rate, and you’re good to go.
USDA Guaranteed Loans: Another loan type you can apply for is Guaranteed Loans. Again, you don’t need to pay a down payment or insurance. However, you have to pay an annual guarantee fee along with your monthly mortgage installments.
USDA House Repair Loans: You can also apply for USDA House Repair Loans in case you want to make needed repairs. The maximum loan limit is $20,000, and you have upto 20-years to pay back your loan.
How to qualify for USDA Loans Texas?
In order to qualify for USDA Loans, you have to adhere to these criteria:
- The property must be located in a rural area
- You must make less than 15% above the average income in that particular area
- You have to prove consistent income flow and employment
- A minimum of 640 credit score
- A minimum of 41% DTI
Final words
While you can also apply for an FHA loan to purchase property in rural areas, the USDA loans are usually more affordable and don’t typically require down payments.
On the other hand, FHA loans have no income restrictions, hence making it easier for people with low income to buy property in rural areas. All in all, both these options have their own pros and cons, and only the right mortgage lender can guide you on which one suits your needs the best.
