Are you looking for a way you can buy a home in Indiana with no down payment? Or maybe you are searching for a mortgage option that offers you competitive rates even without a perfect credit score.

One type of mortgage you might want to consider applying for is a USDA home loan. This is a mortgage product that some borrowers overlook because they do not know much about it. They might assume, for example, that USDA home loans are only for people who will be living and working on a farm.

Nothing could be further from the truth. USDA mortgages are aimed at a wide spectrum of homebuyers. In fact, a USDA home loan might even be right for you.

5 Things You Need To Know About USDA Loans

To help you figure out if that is the case, let’s go over some facts about USDA mortgages that might surprise you.

1. There is no strict loan limit. One interesting thing about the USDA home loan program that makes it a flexible option is the fact that there is no strict, set loan limit that applies across the board to all USDA mortgages. That does not mean you can borrow an unlimited amount with a USDA mortgage. It just means that the amount you can borrow is based on what you can afford individually. So, if you can afford an expensive home, you do not need to worry about a borrowing cap preventing you from buying it with a USDA mortgage.
2. The mortgage insurance requirements are affordable. If you were to purchase a home with a conventional loan with a down payment below 20%, you would need to pay private mortgage insurance (PMI). If you were to buy a home with an FHA loan, you would have to pay a mortgage insurance premium (MIP). So, you might assume that USDA mortgages carry some sort of PMI or MIP equivalent. The closest thing with a USDA mortgage is the “guarantee fee.” This comprises a combination of an upfront fee that you pay when you take out the loan, and an annual fee that you pay going forward. Both the annual and upfront fees for USDA loans come out to less than FHA insurance requirements.
3. You can buy a home with zero down. The most well-known mortgage program with zero down required is probably the VA loan program. So, many borrowers who are not veterans assume that there is no way for them to qualify for any type of zero down home loan. But some of those borrowers might qualify for a zero down loan by applying for a USDA mortgage to purchase a rural property.
4. The income qualification requirements are generous. The USDA mortgage program is income-based. But that does not mean you need to have a very low income to qualify for it. The USDA says here, “Moderate income is defined as the greater of 115% of the U.S. median family income or 115% of the avg. of the state-wide and state non-metro median family incomes or 115/80ths of the area low-income limit.” So, if your income is the same as the median or just slightly above it, you may very well fall within the eligibility threshold for a USDA mortgage in Indiana.
5. The area you do not think is rural might actually be rural. One more thing that surprises a lot of borrowers with respect to USDA mortgages is what the USDA means when they say you need to be buying a home in a “rural” area. You might be picturing a home that is surrounded by crops as far as the eye can see, but that is not the only type of environment that fits within the formal “rural” definition. You might assume that the home you want to buy is not in a rural location, but could be mistaken—it is well worth checking if the population density is not that high.

Apply Now for a USDA Home Loan in Indiana

Now you know more about USDA loans. If you are surprised by how accessible, affordable, and convenient USDA mortgages are, you might have more questions or you may be ready to find out if you qualify. To schedule your consultation, please call (317) 255-0062 today.