Would you like some assistance in buying a house in the rural areas around Albuquerque? One of the least-known programs of the USDA is its mortgage program.

There is a mortgage assistance program available to eligible buyers in rural areas, which could apply to areas around Albuquerque. A USDA loan is issued through the USDA Rural Development Guaranteed Housing Loan Program by the U.S. Department of Agriculture.

The loan program is intended to improve quality of life and economic conditions in rural areas. Rates are relatively low, and no down payment is required. Other USDA programs are also available.

How Does a USDA Home Loan Work?

USDA offers three different loan programs, though loan guarantees are the most common.

A USDA-backed mortgage is backed by a local lender that participates in the program, similar to a VA-backed loan. If you put down little or no money down on a mortgage, you can still get a low interest rate, but you will still have to pay mortgage insurance.

The second program is a direct loan from the USDA. The mortgage can be obtained by low- and very-low-income applicants, and the interest rate can be as low as 1% with subsidies.

Loans and grants that provide homeowners with outright cash to make repairs or upgrades to their homes are called home improvement loans and grants. There are also packages that combine a grant and a loan.

Do You Qualify?

A home loan guarantee has income limits which vary by location. Your household size is also taken into account. USDA-backed loans can only be used for owner-occupied primary residences.

You must be a U.S. citizen or permanent resident, and your monthly payment must be 29% or less of your income. Your payments must include interest, taxes, and insurance. The total of your monthly debt payments cannot exceed 41% of your income, but USDA may allow a higher ratio if your credit score is above 680.

In order to qualify, you need to demonstrate dependable income for at least 24 months, and you need a good credit history. No accounts can have been in collections within the past 12 months.

You will receive streamlined loan processing if your credit score is at least 640. Borrowers with a score below that will face tougher underwriting standards.

If you want a USDA loan, you must demonstrate that you have a great need for housing. It means that you do not have what's characterized as a safe or sane dwelling. Traditional lenders won't offer you a loan, and you might have an adjusted income that's at or below the local low-income limit.

Direct USDA loans are usually issued for properties measuring 2,000 square feet or less, with market values below the loan limit in the area.

USDA loans can only be used to finance homes in rural areas or at the edge of suburbs. You can find out if a home qualifies for USDA funding by going online. All you have to do is enter the address of the home.

In order for you to qualify for USDA loans, your adjusted gross income cannot exceed 115% of the median income where you live.

A USDA loan, like a conventional loan, requires an appraisal before it can be approved, but the purpose of each appraisal is different.

When it comes to conventional loans, lenders want to make sure they aren't giving a loan greater than the property's value. An appraisal for a USDA loan not only ensures the value of the home is appropriate for the loan amount, but also makes sure it complies with USDA requirements. To qualify, the house must be in good livable condition. It must, for instance, have a functional heating system.

There is help for those in rural areas to buy a home in the Albuquerque area. Check out this option and feel free to contact Sandi Pressley and her team to find a home that qualifies.