Affordable Mortgage Offered Through USDA

Government insured home loans may be boring to most lenders, but as rates and home values rise, government mortgages are on the rise. The popularity is partly due to programs that allow little or no money down.

Some first time homebuyers are now being forced to the side when it comes to a home purchase. Rising rates ad high home values are keeping many people from a viable down payment, keeping them from obtaining a mortgage. Enter the creative financing of paying more per month for less of a down payment, or getting a sub-prime loan. A different idea may be to turn to the USDA, which has brought a balance to the rural mortgage market for the last decade.

The programs do require that a person live in a rural area; defined as an area that is less than 50% developed. There is also an income limit that cannot be exceeded based on family size. More than $40 million was given to the USDA in 2005 for loans through approved lenders, including Wells Fargo, Countrywide and Chase. In return, the program gives a borrower 100% financing with no down payment and no mortgage insurance necessary.