Was chatting with my cousin who's buying a place out in the sticks and he casually mentioned he's getting some pretty sweet interest rates with a USDA loan. Had no idea those rural housing loans could be cheaper than the usual mortgages we see around town. Seems kinda cool they're encouraging folks to move out to less crowded areas. Wonder if there's other perks or catches involved... anybody familiar with these loans?
I've been looking into USDA loans myself lately since I'm hoping to buy my first place soon, and here's what I've gathered so far:
- Definitely lower interest rates compared to conventional loans, which is a huge plus for affordability.
- No down payment required in most cases, which is pretty rare these days. But keep in mind, you'll still have closing costs and other fees.
- They do have income limits based on your area and household size. So if you're earning above a certain threshold, you might not qualify.
- The property itself has to meet certain criteria—basically, it needs to be in an eligible rural or suburban area as defined by the USDA. Their definition of "rural" can be surprisingly flexible though; some areas you'd think are suburban actually qualify.
- Another catch: the home has to pass a USDA appraisal and inspection. They're pretty strict about safety standards and overall condition.
One thing I'm still unclear about is how long the approval process takes compared to conventional loans. I've heard mixed things—some say it's quick, others say it drags out because of extra paperwork or inspections. Has anyone here actually gone through the USDA loan process recently? Curious how smooth (or bumpy) it was for you...
Went through the USDA process last year—approval took about 45 days. Not terrible, but definitely slower than my friend's conventional loan. Also, inspections were thorough...had to fix a few minor things before closing. Are you looking at older homes or newer builds?
