on Nov 21, 2022 9:31:31 AM

Why you should consider a USDA Home Loan

Buying or building a new home is an exciting process that includes many steps such as picking finishes, your preferred location and most importantly, securing the proper financing based on your home needs. If you prefer to be in a more rural setting, possibly a city with a smaller population or backing to a countryside, you may be interested in the U.S. Department of Agriculture (USDA) mortgage program which can offer no down payment, no closing costs and a low interest rate*.  

In 2017, as part of its Rural Development program, the USDA helped more than 125,000 families upgrade or buy their homes. These low interest rate loans on new construction homes can be used on production homes – homes that are already in the process of being built or recently finished – or on fully custom homebuilding.  

Thanks to an expert team and plenty of housing options, Hubbell Homes and Origin Homes can help you apply, qualify and create or choose your home quickly and efficiently. 

With all types of mortgage loans to choose from, how do you know whether the USDA loan is right for you? Check out our overview below!  

USDA Loan Overview:  

  • $0 down payment  (The average down payment in the U.S. is roughly 6% of the loan value. Ex: If you purchase a $300,000 home, a $18,000 down payment could be expected.)
  • $0 closing costs 
  • as low as 3.25%* interest rate on a 33-year mortgage (While fluctuating, the current mortgage rate is near 7.25% in Iowa. This reduced interest rate can equal significant cost savings over the loan term.)
  • Fair or OK Credit Score (You must have a credit score of 640 or higher for streamlined processing. If you fall below 640, you will still be considered but may need to meet more standards.)

Other qualifications to consider are that loans can fund only owner-occupied primary residences, you must have a dependable income for a minimum of two years, U.S. Citizenship (or permanent residency), and a variety of debt ratios will be considered based on your monthly payments and credit score. See more outstanding circumstances at the USDA website. 

What Types of Homes Generally Qualify? 

  • Homes generally need to be less than $336,000 in value and many direct loans are used on homes that are 2,000 square feet or less. It all depends on where you live.  
  • Rural towns and locations with populations less than an estimated 20,000 qualify for USDA home loans  
  • Metro areas with a population greater than 20,000 are generally excluded from loan qualifications, but there are some low population suburbs that qualify!  

Home Options 

Luckily, Hubbell Homes & Origin Homes are making it easier than ever to apply for this type of home loan through a loan program specialist and specific home plans: 

  • Hubbell Homes offers a variety of production homes that are in various stages of construction within Danamere Farms in Carlisle and the Featherstone community in Bondurant, both communities that qualify as well as a few other locations around the metro. Prices for these homes range from low-200's up to the loan maximum. 
  • Origin Homes, a semi-and-fully-custom rural homebuilder, will build in any of Iowa’s 99 counties and has a handful of plans that qualify for USDA financing. These plans can be semi or fully customized. While Origin focuses on building custom homes throughout Iowa, this team knows the greatest need for all types of homes are in rural America. In some cases, monthly payments can be as low as $1,100. 

Next Steps  

Hubbell Homes and Origin Homes make it extremely easy to apply through a specific USDA loan program specialist who will help gather your information and materials, so your application is complete upon application. Visit the websites above to get started!  

If you run into any loan qualification issues, our team is here to walk you through the options whether that's offering a home and a different loan through our preferred vendors that still meets your needs and budget.  

**Fixed rate mortgage Direct Loan Program. Qualifications are based on credit history, income, location of home, home value. Primary residency restrictions apply.  

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