Arkansas Homebuyers See Benefits In USDA Program

The USDA (United States Department of Agriculture) mortgage program was created for low income families looking to buy a home in rural areas. This program has become more and more popular in states like Arkansas and other places in the country in recent years, because of the tightening of lender guidelines with conventional mortgage loans.

There are many benefits of a USDA Rural Housing mortgage loan, but these are the main benefits that make this program one of the best mortgage loans available.

No Down Payment Required

This mortgage program still allows you to buy a home with no money down. It's one of the only programs still available that allows 100% financing. This is a great benefit, because you can buy a home with very little money out of pocket. This leaves more money for home improvements and savings for future repairs of anything breaking down in the home.

No PMI Required

Conventional mortgages require a PMI (Private Mortgage Insurance) payment, in addition to the regular mortgage payment, if you don't have a down payment of at least 20%. The USDA Rural Housing program doesn't require PMI, even if you finance 100% of the purchase price. This is a huge benefit, since it keeps your mortgage payment low, while allowing you to qualify for a larger mortgage loan. No one wants to pay PMI, because it's not applied to the principal balance or the interest you pay over the life of the mortgage loan.

Low Interest Rates

Even though you don't have to put any money down with USDA Rural Home loans, you will still receive a lower interest rate. Depending on your situation, typically, the interest rates are not much more than 0.5% higher than conventional mortgage loans. This is a great benefit in addition to not having to come up with a down payment and not having to pay PMI. A lower interest rate will save you tens of thousands in interest payments over the life of the mortgage term.