Did you know that USDA (United States Department of Agriculture) and Rural Housing still offer 100% home loans through approved mortgage lenders? In the past, many people think of USDA as loans only for farmers – to be used only to purchase properties in country agricultural areas.
That not the case today with the Tennessee USDA Rural Development home loan. In fact, many properties are still eligible just outside of Tennessee’s major metropolitan cities like Nashville, Memphis, Knoxville, Chattanooga, etc. A USDA loan provides low-cost government-insured home mortgage loans that fit a variety of home buyers. The program is especially great for Tennessee first time home buyers that have little to no cash savings for a large down payment. USDA is one of the only program today that allows 100% home financing in TN.
First let’s discuss the different USDA mortgage types: Currently, there are two kinds of USDA loan programs available for single-family households:
USDA 502 Guaranteed Rural Housing Loans:
USDA 502 Guaranteed Loans are the most common type of USDA loan and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. Income limits in Tennessee start at about $90,300 per year for a family of 1-4.
Households size and county also determines the allowed income limits, please contact us below to discuss the income limits in your county. Most home buyers will fall under the moderate-income 502 Guarantee program – this program is offered solely by USDA approved lenders and banks. Continue reading