100 Percent USDA home loans provide mortgages to home buyers in eligible rural defined locations with no down payment needed. Many popular locations in California are still eligible and actually considered “rural”
USDA RD loans are designed to provide competitive financing to individuals and families who want safe, sanitary, and modest accommodations. These loans are originated by approved USDA lenders like Modern Lending and backed by the United States Department of Agriculture Rural Development.
Buyers shouldn’t assume their area is not eligible before checking the USDA map below. Even a few more populated locations outside of Temecula, San Diego, etc are approved. Please find the map of Central CA below. The darker shaded locations are not eligible, all of the lighter colored areas ARE eligible.
Single Family Housing (502 Guaranteed Loan)
Single Family Housing 502 Guaranteed loan program allows moderate-income individuals and families to own a decent dwelling as their home. This program is ideal for CA households that don’t have 3, 5 or 10% down payment often required by conventional loans.
Basic USDA Mortgage Requirements:
- Household income must be below the set county USDA income limit
- Applicants must personally occupy the property as a primary residence. The property must be located in a USDA eligible location – check property address here
- Borrowers will need to have credit over 620 with no serious financial hardships in recent years
- Two years of steady employment and income
USDA Rural Development offers many benefits to first time buyers:
- 102% Financing (Up to Appraised Value)
- Low monthly mortgage insurance (nearly 50% less compared to FHA loans)
- No Down payment Needed – 100% financing.
- USDA is not only for first time home buyers – can be used by move up buyers as well.
- No bank or saving reserves required
- No limit on seller concessions, seller can pay all closing costs.
- 100% Gift Allowed from family, etc.
- Easy credit score guidelines (600 score required)
- No maximum purchase price/loan amount limit. Buyers qualify based on their debt and income
- Secure low 30-year interest rate
Any single-family home (in basic move in condition) is eligible. The home must be located in a USDA approved area. Mobile and Manufactured homes are not eligible.
No special home buyer class needed to get started. Buyers can get pre-approval and start house shopping all in the same day!