Dreaming of More Space This Summer? A USDA Loan Might Be The Answer You Didn’t Expect
There is something about summer that makes people crave a little more room.
Maybe it’s the backyard where the kids can run until the fireflies come out, or maybe it’s simply the thought of trading crowded neighborhoods for quiet streets, open skies, and a place that finally feels like home.
The good news? That dream may be much more affordable than you think thanks to the USDA’s Rural Development home loan product.
This loan type does not require any down payment, but you do have to live in a ‘rural’ community.
Many buyers are surprised to learn that some of Iowa’s most desirable small communities qualify for a USDA Rural Development loan, and no, you don’t have to live on a farm to use one OR live extremely far from “civilization.”
If you’ve been assuming a USDA loan isn’t for you, keep reading. You may be leaving one of the best home financing options on the table.
More Towns Qualify Than Most People Realize
One of the biggest misconceptions about USDA loans is that they’re only available in extremely rural areas, far from shops, restaurants, etc.
In reality, the program was created to encourage homeownership in communities with populations under 35,000. That means many of the towns people love because of their small-town feel, great schools, and short drive to larger cities are actually eligible.
Communities like Solon, Tiffin, Williamsburg, Swisher, Newton, and many others throughout Iowa qualify. In fact, there are far more eligible towns than ineligible ones.
If you’ve found a home and aren’t sure whether it qualifies, that’s an easy answer. Just send us the address, and we’ll confirm eligibility for you.
Why Buyers Love USDA Loans
USDA loans continue to be one of the most affordable financing options available for qualified buyers.
They offer competitive fixed interest rates and flexible qualification guidelines while making homeownership accessible for households that meet the program’s income requirements.
To qualify, the home must be your primary residence, you must be a U.S. citizen or permanent resident, and household income must fall within USDA’s limits. As far as credit score goes, many buyers qualify with a credit score of 640 or higher.
Every situation is different, which is why having an experienced lender review your finances is the easiest way to determine if a USDA loan is the right fit.
Let’s Clear Up a Few USDA Loan Myths
Unfortunately, USDA loans sometimes get an unfair reputation because lenders who don’t specialize in them misunderstand the program.
One myth is that USDA loans take forever to close. At RMN, that’s simply not true.
Because we underwrite our loans in-house, we’re able to keep everything moving without waiting on a third-party company. Our loan officers, processors, and underwriter work together every day, which means questions get answered quickly and files continue moving toward the closing table.
We’ve completed hundreds of USDA loans over the years, so this isn’t a program we’re “trying out.” It’s one we know inside and out.
What About the Guarantee Fee?
Another misconception is that the USDA guarantee fee makes the loan expensive.
While USDA loans do include a 1% upfront guarantee fee that is financed into the loan, along with a small annual fee that’s included in your monthly payment, many buyers find the overall monthly payment is still extremely competitive – meaning a lower payment than other loan programs.
In many cases, USDA loans offer lower interest rates than conventional financing, making them an excellent option for buyers who qualify.
Looking at one fee by itself never tells the whole story. What really matters is your total monthly payment, and we’ll help you compare every option so you know exactly what makes the most financial sense.
Does the Home Have to Be Perfect?
Not at all.
Another common misconception is that USDA requires homes to be flawless.
Like any mortgage program, the home does need to meet basic safety and livability standards. If an appraiser identifies items like peeling paint, missing handrails, or roof issues, they’re often straightforward repairs that can be addressed before closing.
These aren’t unique to USDA loans, and they certainly shouldn’t stop you from considering the program if it’s the best fit for your situation.
Where You Get Your USDA Loan Matters
This may be the most important part of the conversation.
Not every lender handles USDA loans the same way.
Some banks process very few of them and may even steer buyers toward another loan program simply because they’re less familiar with USDA guidelines.
For us, USDA loans are part of what we do every day. We know the program inside and out! We have been one of the top 3 lenders in Iowa for this program for several years.
Ready to See What’s Possible?
If summer has you imagining more backyard barbecues, quieter evenings, and a little extra space to call your own, don’t assume your dream home is out of reach.
You may be surprised by how many homes qualify for USDA financing, and how affordable they can be.
Before you rule out a property or assume you don’t qualify, reach out to our team. We’ll answer your questions, verify whether an address is eligible, and walk you through every option so you can make the best decision for your future.