USDA Home Loans

A USDA loan is a mortgage that offers affordable home buying opportunities in rural and suburban areas.

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New Home, New Opportunities.

USDA home loans are issued through private lenders but are guaranteed by the United States Department of Agriculture to stimulate growth in rural areas through affordable housing opportunities.

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USDA home loans are meant to stimulate rural development through affordable home buying opportunities to low-to-moderate income households. These loans are available in approximately 97% of the nation’s land mass.

No down payment needed

USDA home loans could be a great opportunity for first time home buyers as there is no down payment needed — instead of the traditional 5-20% down payment.

Flexible credit guidelines

There’s no minimum credit score requirement for USDA loans. However, you do need a score of 640 or higher to qualify to use the USDA’s automated underwriting system. Most conventional lenders look for a credit score of at least 640, but typically offer the best lending terms for credit scores above a 740.

Lower monthly mortgage insurance

Lenders require private mortgage insurance for conventional loans that don’t have a 20% downpayment. FHA loans also have high annual mortgage insurance fees too. Insurance on USDA home loans are a little different. Instead, the USDA uses two fees: an upfront fee that is paid once you close on the loan and an annual fee which gets rolled into monthly mortgage payments. Short story made short: USDA loans have the lowest funding fee of all government-backed home loans.

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Still have questions? Get in touch with one of our experienced mortgage lenders to see if a conventional loan is a good fit for you.

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USDA Home Loan FAQs

BNC National Bank does not charge a lender fee for VA loans under most circumstances.

The VA allows a veteran to hold multiple VA loans at the same time. Please contact us with your specific situation to see if this is an option for you.

Since VA loans are backed by the federal government they tend to be lower than conventional rates. BNC’s VA rates are typically lower than the national average as well.

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