Everything You Need to Know About USDA Home Loans in Georgia

The USDA home loan program provides a great opportunity for low- and moderate-income homebuyers in rural areas to purchase a home USDA home loans, also known as Section 502 direct home loans, offer 100% financing and low interest rates to help make homeownership attainable for many who may not qualify for conventional mortgages

If you are looking to buy a home in a rural area of Georgia a USDA loan may be a good option for you. In this comprehensive guide, we will cover everything you need to know about the USDA home loan program in Georgia – from eligibility requirements loan terms, and application process to pros and cons.

Overview of USDA Home Loans

The USDA home loan program is administered by the United States Department of Agriculture (USDA) Rural Development agency It offers low-interest mortgage loans with no down payment directly to low- and moderate-income homebuyers in eligible rural areas

Some key features of USDA home loans include:

100% financing – no down payment required
Low fixed interest rates
Flexible credit score requirements
No maximum income limits
Allows non-traditional credit
No mortgage insurance required

The Section 502 direct loan program helps rural residents who cannot qualify for traditional mortgages obtain decent, safe, and affordable housing. The program provides payment assistance to borrowers to help make their monthly mortgage payments more affordable.

USDA Home Loan Eligibility in Georgia

To be eligible for a USDA home loan in Georgia, you must meet certain income and home location requirements:

Income Eligibility

Your household income must be below the income limit set for your county. Income limits range from $60,000 to $112,000 depending on your family size and where you want to buy a home. You can check income limits by county in Georgia here.

Home Location

The home you wish to purchase must be located in a rural area designated as eligible for USDA home loans. Over 75% of areas in Georgia qualify. You can verify if a property is in an eligible area by using the USDA’s eligibility site.

Credit Requirements

The USDA has flexible credit score requirements. They will consider scores as low as 640. If your score is below 640, you may still qualify with a down payment or non-traditional credit history.

Other Requirements

Be able to afford the monthly mortgage payments
Provide evidence of adequate and dependable income
Have an acceptable credit history
Be a U.S. citizen, U.S. non-citizen national, or qualified alien
Cannot be delinquent on any federal debt

How USDA Home Loans Work in Georgia

Here are some key details on how USDA home loans work for homebuyers in Georgia:

Loan Amount

USDA home loans offer 100% financing. The maximum loan amount you can borrow depends on your repayment ability and the appraised value of the home up to the maximum limit for your county. Loan limits range from $200,160 to $375,500 across Georgia.

Downpayment

No down payment is required for a USDA home loan. However, borrowers with assets exceeding program limits may be required to use some of those assets.

Interest Rates

USDA home loans have fixed interest rates that are very competitive with conventional mortgage rates. As of January 2023, USDA loan rates in Georgia range from 4.75% to 7.25%.

Monthly Payments

Your monthly mortgage payments are calculated based on your income, debts, interest rate, loan term, and any subsidies or payment assistance you may qualify for. Loan terms can range from 30-38 years.

USDA provides payment subsidies to help borrowers with limited income better afford the monthly payments. Subsidies can reduce your payment by as much as 26% of your household income.

Loan Terms

USDA home loans come with 30-38 year loan terms. The longer 38 year term is available to help very low-income borrowers qualify.

Mortgage Insurance

No mortgage insurance is required with a USDA home loan. This can save you hundreds per month compared to an FHA or conventional loan.

The USDA Loan Process in Georgia

If you want to get a USDA home loan in Georgia, here are the steps in the process:

1. Check Eligibility

Use the USDA eligibilty tools to see if you qualify based on income limits and home location.

2. Find a Home

Work with a real estate agent to find a home in an eligible rural area that fits your budget.

3. Get Pre-Qualified

Work with a USDA approved lender to get pre-qualified and pre-approved for a loan amount.

4. Make an Offer

Make an offer and negotiate the purchase price for the home you want.

5. Apply for Your Loan

Your lender will guide you through compiling all required documents and submitting your full loan application.

6. Home Inspection

The property will be appraised and inspected to ensure it meets USDA standards.

7. Loan Approval

USDA will review your application and issue a conditional commitment if approved.

8. Close on Your Home

Once all conditions are cleared, you can close on your new home!

Pros and Cons of USDA Home Loans

USDA home loans offer many benefits, but also have some downsides to consider:

Pros

100% financing means no down payment
Below market interest rates
Flexible credit score requirements
Payment subsidies available
No mortgage insurance required
Can finance closing costs into loan

Cons

Limited to rural locations
Upfront guarantee fee of 1% of loan amount
Monthly fee of 0.35% of loan balance
Strict income and property eligibility limits
Home must meet USDA standards
Longer approval process due to government underwriting

Alternatives to USDA Loans in Georgia

Some alternatives to USDA loans for Georgia homebuyers include:

FHA loans – Offer low down payments and flexible credit requirements. Require mortgage insurance.
VA loans – Provide 100% financing for veterans and service members. Limited to veterans.
Conventional 97 – Allow 3% down payment for buyers with good credit. Require mortgage insurance.
Down payment assistance programs – State and local programs provide down payment and closing cost grants. Must be combined with first mortgage.
Georgia Dream Homeownership Program – Offers affordable fixed-rate financing and down payment assistance to lower income buyers.
HomeReady & Home Possible – Freddie Mac and Fannie Mae 3% down conventional mortgages with flexible income criteria.

The Bottom Line

For homebuyers on a budget looking in rural Georgia, a USDA home loan can be a great way to purchase a home with no down payment and at below market interest rates. Just make sure to consider the eligibility requirements, limitations, and process to decide if a USDA loan makes sense for your home buying goals.

Need a 620 credit score

USDA Loans .Net requires a middle credit score of at least 620. If you are close, apply and we can help.

USDA Eligibility Map – Georgia

For starters, a USDA loan is one of the only loan programs offered to the general public that allows you to finance 100% of your home’s value. That means no down payment of any kind!

USDA loans are made even more affordable through very competitive fixed interest rates, ensuring your payments will not increase every month.

5 Things You Need to Know About USDA loans

FAQ

What is the income limit for a USDA loan in Georgia?

Household Income for USDA eligibility – In general for 2024, Georgia households with 1-4 members = max $110,650 gross income per year. Some counties can be even higher. Larger households with 5+ members can even go higher, up to $146,050. USDA also allows deductions for child care, elderly, disabilities, etc.

What credit score do you need for a USDA loan in Georgia?

Approved USDA loan lenders typically require a minimum credit score of at least 620 to get a USDA home loan. However, the USDA doesn’t have a minimum credit score, so borrowers with scores below 620 may still be eligible for a USDA-backed mortgage.

Is it easier to get FHA or USDA?

To qualify for a USDA loan, most lenders require a credit score of at least 640, though this number may vary depending on the lender. To qualify for an FHA loan, a credit score of at least 580 is most often required. Some lenders will allow a credit score in the 500 – 579 range if you make at least a 10% down payment.

How do I apply for a home loan in Georgia?

Applications are accepted and processed through your local Rural Development Service Center year round. This list shows the phone number for the USDA Rural Development Georgia Service Centers for each Georgia County. Applications must be submitted through an approved lender, (a bank, mortgage company or credit union).

What is USDA Rural Development?

As a part of USDA Rural Development, our mission is to be a cost-effective service provider that strives to help homeowners and their families remain successful homeowners throughout the term of the loan. Our home loans are serviced by the Customer Service Center (CSC), located in St. Louis, Missouri.

Where can I find a USDA eligible rural area?

The property must be located in an eligible “rural area.” Eligible rural areas can be located on the interactive map at the USDA Eligibility website. The property must be located in an eligible “rural area.” Eligible rural areas can be located on the interactive map at the USDA Eligibility website. Refer to HB-1-3555 Chapter 12

How does Rd determine eligibility for a home loan?

Upon receipt of a complete application, RD will determine the applicant’s eligibility using verified information and the applicant’s maximum loan amount based on their repayment ability and the area loan limit for the county in which the property is located. What is the interest rate and payback period?