Zero-Down USDA Mortgages Continue

Amid all the talk of increasing mortgage rates and tighter lending restrictions, one very unique product is still offering qualified borrowers the opportunity to put no money down on their home purchase.  The USDA loan (officially called the Rural Development Housing Program) allows certain buyers the chance to buy certain properties without the usual down payment requirements.

USDA loans have a two-stage qualifying process.  First, the property must qualify.  To be eligible, properties being purchased with a USDA loan must be located in specific, designated rural areas.  But don’t let that dissuade you…some of those areas are closer to  Austin than you might think. Areas such as Kyle, Liberty Hill, and Hutto are USDA eligible.  Contact us at for the complete list of USDA eligible rural areas near Austin.

The second stage of qualifying is for the borrower. This isn’t the old days of no doc/low doc loans.  This isn’t a gimmicky, sub-prime product. Buyers who wish to use a USDA loan must be able to fully document their income status and fall below certain income levels, while still being able to handle the monthly payment burdens of homeownership.  The truest measure of the value of the USDA loan program is that it still exists, while less responsible products have gone away.

There is an upfront fee of 3.5% that the borrower must cover, but can be rolled into the final loan amount. Other restrictions also apply.  The home must serve as the buyer’s primary residence, so it cannot be used for investment properties.  While the most common borrower is a first-time homebuyer, the program does allow previous homeowners to participate as long as they have sold their previous home and paid off their previous mortgage in full.  So city-dwellers who are looking to move to quieter locations can still take advantage of this opportunity.

Mission Mortgage proudly offers USDA loans and we have a number of experts on our staff who can guide you through the process. Email us at for more information.


About missionmortgage

A full-service professional mortgage banker providing lending in Texas for over 25 years. Our main office is located at 901 S. Mopac Expwy, Barton Oaks V- Suite 120, Austin, TX 78746 with branches in Lakeway, Houston, and Sealy. Mission Mortgage has been ranked as a Top 10 Mortgage Company in Austin for the past 7 years (Austin Business Journal).
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