USDA loans are a competitively priced mortgage type that is designed to incentivize homeowners to purchase homes in areas designated as rural by the U.S. Department of Agriculture. They back these mortgages and offer advantageous mortgage benefits such as lower interest rates than conventional loans and no down payment required for qualified buyers. In Maryland, despite the significant amount of urbanization, there is a wealth of rural areas that USDA loans can apply to. USDA loans in Maryland are an advantageous way to receive favorable terms on your mortgage and afford the home you desire.
As previously mentioned, one of the biggest advantages of using a USDA loan is the ability to secure a mortgage loan with a low down payment, potentially even $0. Due to the loan being backed by the USDA, lenders are able to offer interest rates significantly lower than traditional mortgage plans.
Another major advantage is that USDA loans require no private mortgage insurance. Instead, two fees will be issued: an annual fee that is included in your monthly payments, and an upfront guarantee fee, which is paid once the loan is closed. Another great benefit to a USDA loan in Maryland is that it is widely available.
The definition that the USDA considers as rural is much broader than one would expect. In fact, to be defined as rural, an area must only have a population of less than 35,000 people. This means that a majority of Maryland actually qualifies for USDA loans. In the United States, it is estimated that 97% of the land would be considered eligible for a USDA loan. If you are looking for USDA areas in Maryland, refer to our map to find out what areas qualify as rural.
If you’d like to look up a specific property, you can use the USDA’s interactive eligibility tool.
*Areas highlighted in dark purple are ineligible for USDA loans.
As previously mentioned, the main requirement for USDA loan eligibility is that the area the desired home is in is located within a “rural” designated area. You must also be a United States citizen, permanent resident alien, or noncitizen national. USDA loans in Maryland are only available for those whose adjusted gross income does not exceed 115% of the median income in the area you wish to purchase in. Additionally, you must be able to prove a stable income and that you will be able to make monthly payments for a year based on your current financial situation. Lenders will also look at your debt-to-income ratio to see if you qualify. It is generally recommended to have a DTI of 43% or lower. Finally, is your credit score, which all lenders will check regardless of the mortgage loan type. The majority of USDA lenders in Maryland will require a credit score of 640 or above. Lower credit scores may still qualify with less favorable mortgage terms.
Mortgage rates are constantly changing, so staying up to date with them is pivotal when shopping for a mortgage. At Federal Hill Mortgage, we continue to update you with the latest mortgage rates in Maryland, so that you can make informed decisions on your home purchase.
With a multitude of variables, calculating a mortgage might seem like a challenging task, however, with the use of a mortgage calculator, you can manipulate your mortgage variables to gain an accurate depiction of what your mortgage might look like. See how a larger downpayment could affect your monthly payments, or how a lower interest rate could affect your total amount paid. Using a mortgage calculator allows you to gain valuable insight into which mortgage terms would work best for you. Check out our Maryland Mortgage Calculator to build your ideal mortgage plan.
As USDA lenders in Maryland, we understand the importance of providing comprehensive guidance throughout every step of the mortgage process. Our mortgage experts will work closely with you to determine the best mortgage plan possible to help you achieve your home-buying goals. Our reviews serve as a testament to our strong reputation for being able to craft beneficial mortgage plans
USDA loans in Maryland are a great choice for anyone wishing to live outside of the major metropolitan areas. If you want to purchase a home in close proximity to a metropolitan area, there is a wide availability of rurally designated neighborhoods near populated areas where USDA loans are still available. In Maryland, there are a wide variety of beautiful locations that are considered rural such as deep creek and parts of the eastern shore, so, if you are searching for a home in one of Maryland’s many natural paradises, a USDA loan could benefit you greatly.
A USDA loan can be highly advantageous to those who use them. With conventional loans typically requiring a 20% down payment, USDA loans make buying a home a possibility for those who otherwise could not afford a down payment of that size. Additionally, the favorable interest rates are another way that USDA loans make purchasing a home a reality. Pair that with the wide availability of USDA loans in Maryland and it’s clear just how beneficial they can be. If you want to learn more about USDA loans or are looking for a team of professional mortgage brokers to facilitate your home purchase, look no further than Federal Hill Mortgage. Call or contact us today to begin the process of securing your dream home.
A USDA loan can be highly advantageous to those who use them. With conventional loans typically requiring a 20% down payment, USDA loans make buying a home a possibility for those who otherwise could not afford a down payment of that size. Additionally, the favorable interest rates are another way that USDA loans make purchasing a home a reality. Pair that with the wide availability of USDA loans in Maryland and it’s clear just how beneficial they can be. If you want to learn more about USDA loans or are looking for a team of professional mortgage brokers to facilitate your home purchase, look no further than Federal Hill Mortgage. Call or contact us today to begin the process of securing your dream home.
