What is a USDA Loan?

The primary goal of the Unites States Department of Agriculture (USDA) loan is to improve the market for rural areas and help mortgage lenders with the defaults on this specific product. The USDA loan is one of the top loans offered in the United States and can be offered with 100% financing. Assurance Financial has amazing rates for USDA loans in Birmingham and Tuscaloosa. Another term for the USDA loan is the rural development loan.

How can I use a USDA Loan?

A Birmingham and Tuscaloosa USDA loan can be used for purchasing a home, refinancing an existing home, and streamline loans. Streamline refinance loans are available that can reduce the payment by lowering the interest rate on the current Birmingham and Tuscaloosa USDA loans.

Why should I use a USDA Loan?

A Birmingham and Tuscaloosa USDA loan allows for some lower credit scores and a no down payment option compared to other home loans. Borrowers could potentially qualify for a USDA loan without having any out of pocket expenses when purchasing or refinancing their home. USDA loans are great for first time home buyers in Birmingham and Tuscaloosa Alabama.

USDA Loan Requirements:

  • Income requirements: There are limits on the household maximum income to qualify for a USDA loan in the Birmingham or Tuscaloosa areas. The normal limit is $74,750 total household income no matter if the other person is on the loan or not. There are exceptions depending on the number of people in the household.
  • Down Payment: There is typically NO down payment for most USDA loan options.
  • Credit Score: A 620 is the minimum middle credit score requirement for a USDA loan with Assurance Financial.
  • Property Requirements: USDA loans in Birmingham and Tuscaloosa areas must meet specific requirements set forth by USDA. Once Assurance Financial underwrites a file it must be sent to the local USDA office for final approval before closing on the loan.

USDA Mortgage Insurance Premiums

USDA loans in Birmingham and Tuscaloosa have 2 different types of mortgage insurance related premiums also known as commitment/guaranteed fees. One has an upfront premium of 1% of the base loan amount. The other is a monthly premium of .35% of the base loan amount divided up over a year of payments.

Working with a Qualified Lender

We are committed to assisting our clients with all of their Birmingham and Tuscaloosa Alabama mortgage needs here at Assurance Financial. If you are a first time home buyer, moving to another home, or refinancing to save on your current payment, we can assist you. Contact me, Ransom Kelly (205-624-0484), today for any questions that come up about any Birmingham or Tuscaloosa USDA loans.