USDA Mortgage Loans in St. Louis, MO

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USDA Missouri Rural Development Home Loans

We are committed to offering products with the best mortgage rates, which is why Liberty Lending Consultants is proud to provide our customers with USDA home loans in Missouri.

Since its inception in 1949, the United States Department of Agriculture (USDA) set up the lending guidelines for a program that promotes farming in America, which is why it is also called the USDA Rural Development Loan. Since then, the USDA mortgage loan has allowed over a million aspiring homeowners to obtain housing with little to no money down. This loan type reduces costs in rural and suburban areas where people are looking for homes in Missouri. Compared to the other types, USDA loans are some of the most cost effective home buying programs in the marketplace today, and their popularity is increasing daily.

Buyers are discovering an easy way to buy a home with zero down payment, low-interest rates, and affordable payments from a USDA home loan in Missouri. Over 130,000 people benefited from the Rural Development program in 2011 alone. Along with 30-year terms and 100% financing, homebuyers receive a very competitive interest rate that stays consistent throughout.

There are many areas in Missouri that are eligible for a USDA Loan. As you would expect, most of the surrounding areas of Saint Louis are ineligible but there are a few places on the outskirts of the Saint Louis area that are eligible. They include certain portions of Maryville, Columbia, and Villa Ridge. These are only a few of the surrounding areas of Saint Louis that are eligible for a USDA Loan. To learn more about which areas of Missouri are eligible for USDA financing, Liberty Lending Consultants can help you find what you need.

Contact our team today to see if a USDA rural development loan is right for you.


What Are the Advantages of USDA Home Loans from Liberty Lending Consultants?

  • 100% financing, meaning you can move into your dream home today without putting together a large down payment
  • Low monthly private mortgage insurance (PMI). For PMI, USDA loans carry a 1% upfront guarantee and 0.35% annual fee that is charged in your monthly payment. The guarantee fee, which can be seen as an upfront cost in the absence of the required down payment, can be spread through the mortgage to avoid any upfront costs
  • 15 and 30-year fixed mortgage rate on USDA Loans will never go up or down, and the USDA guarantee usually makes payments smaller than with a conventional mortgage
  • Closing costs can be rolled into the USDA mortgage. This is yet another way the USDA Loan program helps you avoid upfront costs
USDA Loan Eligibility Requirements

USDA Loan Eligibility Requirements

A USDA rural housing loan comes with a lot of benefits; most notably, reduced costs. Before you can take advantage of the zero down payment, low rates, and affordable monthly payment, there are some requirements to qualify. After all, the purpose of the loan is in the name: rural development.

First, the property you want to purchase must be located in a USDA-eligible rural area. Many homes and buildings in rural and suburban Missouri qualify and our expert mortgage brokerage will work with you to make sure the property is within these areas. You must also maintain a certain household income cap. On average, the cap is around $75,000 per year for a one to a four-person household.

Your income also needs to be up to 115% of the median income for the area in which your property is located. But you don’t need to know that information yourself, as one short conversation with a loan officer will help you determine if your income qualifies.

Finally, you’ll need to have a credit score of at least 620 or a credit history that demonstrates you can pay your mortgage on time each month. Essentially, USDA Loans are issued with the understanding that they are going to become some type of farmer, who works seriously to meet the income cap.

The good news is that when you meet all of these requirements, you can take advantage of the exceptional benefits that come with a USDA loan.

USDA Loan Vs. Conventional Mortgage Loan

Compared to a conventional mortgage loan, USDA loans are much more borrower-friendly, though they are not as widely available as conventional loans. USDA loans are issued by the United States Department of Agriculture for prospective homeowners looking for housing in rural areas. USDA loans are restricted to certain geographical regions and need a fairly healthy credit history. Here’s how USDA loans differ from conventional mortgages.

USDA Loans

USDA loans are offered to home buyers looking to buy a house in rural, and occasionally, suburban areas. USDA loan eligibility is determined by a pre-determined geographical region that the USDA designates as eligible for housing loans. Once we’ve determined your eligibility for a USDA housing loan based on location, you must then check eligibility based on creditworthiness and finances.

USDA Loan Details

  • Limited to select areas fit for agriculture, and certain properties built for living in these areas (i.e. farmhouses)
  • Zero down payment, with closing costs and fees that can be rolled into monthly payments
  • Fees: $1,000 per $100,000 borrowed, factored into total mortgage
  • Private Mortgage Insurance (PMI) is required and can be financed into the mortgage
  • Must have a 620 FICO Score or higher

Conventional Mortgage Loans

Conventional mortgage loans are easier to receive than USDA loans because of the lack of locational requirements, but they are not nearly as generous in terms of monthly payments, insurance, and down payments. Unlike USDA loans, conventional loans can be applied to secondary and investment properties that the home buyer may not intend to occupy at any point.

Conventional Housing Loan Details

  • Eligible a primary (e.g. family homes), secondary (e.g. summer homes), and investment properties
  • The down payment varies according to a number of factors, including the cost of the home and the borrower’s credit score
  • Fees vary according to the institution and the borrower
  • PMI is usually required and can be up to 20% of the total loan
  • Usually need a FICO Score of at least 620, though some institutions will work with lesser-qualified borrowers in special occasions

Regardless of what loan you’re looking for, Liberty Lending Consultants will work with you to ensure you receive the best rates available. We are ready to assist you through the mortgage process when searching for St. Louis mortgages and housing loans.

Missouri USDA Loan Requirements

As noted above, USDA loans are restricted to certain geographical regions, properties, and incomes. Unlike conventional home loans, you must fulfill all USDA loan requirements to gain approval. Regions eligible for USDA loans vary by location, as do income requirements. Below is a general outline of the USDA Loan Requirments.

  • The home or property in which you plan on buying must be in a USDA-certified region
  • USDA Home Loans can only be applied towards primary properties
  • Lower to middle-income individuals or families are typically targeted for these loans. Some middle and most upper-income individuals or families will not be eligible for USDA home loans in most cases

USDA Loan Property Requirements

USDA loans are a popular mortgage option provided by the U.S. Department of Agriculture to support homeownership in eligible rural areas. These loans offer favorable terms and benefits to low-to-moderate-income borrowers who meet specific criteria. One essential aspect of USDA loans is the property requirements that must be met for eligibility. Here are some general guidelines:

  • Location: The property must be located in a designated rural area as defined by the USDA. These areas are typically outside of densely populated urban regions, but specific eligibility maps are available to determine if a particular property qualifies.
  • Primary Residence: USDA loans are intended for primary residences only. This means that the property must be the borrower’s main place of residence and not used for investment purposes or as a vacation home.
  • Property Condition: The property should meet certain quality standards to ensure it is safe, sound, and suitable for living. The house should have a permanent foundation and be structurally sound. It should also have adequate heating, plumbing, and electrical systems.
  • Access and Utilities: The property should have year-round access to a public road or an approved alternative. It must also have access to essential utilities such as water and sewer systems that meet the USDA’s standards.
  • Size and Use: USDA loans are intended for modest homes. The property should not have excessive acreage or income-producing features like farm buildings. The focus is on providing affordable homeownership options rather than supporting large-scale agricultural operations.

Why Get a Missouri USDA Loan?

In cases where the requirements are aligned-e.g. properties that are selected based on their eligibility and potential-the perks of a USDA loan outweigh all the other options. While USDA guidelines for approval can be tight, they are much more flexible when it comes to what the loan is used for. The government’s thinking on this subject is that farms will always provide the backbone of food production in the U.S. so people will always venture to use a farm because it will have an accepting market waiting for it. We specialize in primary residence so this does not mean that your property must be used for farming and it certainly does not mean all USDA-eligible properties are already farms. All of the areas we offer USDA loans for are intended for rural development, as opposed to the actual raising of livestock or growing of crops. Looking into this type of loan based on location rather than how the land will be used could lead to big opportunities in terms of reduced costs and no down payment.

We receive many requests for this type of loan and a number of requests are associated with credit. We work with our clients to meet the proper requirements and move towards their goals. We invite interested applicants with at least a 620 FICO score to inquire about USDA loans.

Single Family Housing Guaranteed Loan Program

The Single Family Housing Guaranteed Loan Program is a government loan program that guarantees a certain percentage of the purchase price of a home. If you are purchasing a home in an eligible rural area, this loan will cover 100% of the appraised value. There is no down payment required, and you can obtain this loan from a nationally approved lender. To qualify, you must meet income standards and have a credit score of at least 680.

This program was created by the USDA Rural Development to help low and moderate-income Americans purchase their first homes. It is based on Section 502(h) of the Housing Act of 1949 and provides a mortgage loan to qualified buyers. It is available in 97% of the U.S., including many suburban areas that are near major cities. To qualify, an area should have a population of 20,000 or fewer. The USDA considers areas in this category to be rural if they are less than 35,000 people.

The USDA has two loan programs available. The USDA Single Family Housing Guaranteed Loan is a low-income loan that does not require a down payment. The USDA Single Family Housing Direct Home Loan has stricter eligibility requirements than the USDA guaranteed loan program, and you cannot use a USDA direct loan for a second home. The direct loan amount has an income limit for the borrower and the price of the home must be under a certain amount based on the area’s average income. Direct loans are for up to 33 years, with the possibility of an extension up to 38 years.

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