Did you know that 120 out of Georgia’s 159 counties are rural? This gives plenty of opportunities for people looking to buy a new home in Georgia to apply for a USDA loan. Georgia USDA loans are backed by the US Department of Agriculture and are aimed at giving rural areas a boost with favorable loan amount terms.
Rural areas need help to keep their population, particularly in Georgia, and USDA loans make purchasing a home in quieter rural areas more appealing. The purpose is to improve the living standards of people already living there and to bring in more people wishing to relocate to the beautiful Georgia rural scenery.
Atlanta, South Fulton, Savannah, and Augusta usually attract the attention of a first-time home buyer but there are suburban and rural areas just outside these cities that offer peaceful and quality living while still within driving distance from these bustling areas.
The main advantage of USDA loan programs is that they come with low, fixed interest rates and no housing down payment requirements. First-time home buyers find USDA home loans more achievable to enter the property ladder and make rural Georgia their forever home. With such large rural expanses, the Peach State can become your home and you can benefit from excellent living standards slightly removed from Georgia cities.
The USDA rural home loan program offers an incredible opportunity for potential homebuyers in Georgia – the chance to purchase a home with no down payment required. Known formally as the USDA Section 502 Direct Loan Program, this government-backed mortgage option provides 100% financing to eligible borrowers looking to buy homes in rural and suburban markets across the state.
In this article we’ll break down everything you need to know about USDA loans in Georgia including
- USDA Loan Eligibility Requirements
- Benefits of a USDA Mortgage
- How to Apply for a USDA Home Loan
- Georgia USDA Loan Limits and Rates
- The Difference Between USDA Direct and Guaranteed Loans
- Resources for First-Time Homebuyers in Georgia
Whether you’re a first-time buyer or looking to move up to your dream home, a USDA loan could be the ideal mortgage solution for you. Keep reading to learn more!
USDA Loan Eligibility in Georgia
To qualify for a USDA home loan in Georgia there are a few requirements you must meet
Home Location The home you wish to purchase must be located in an eligible rural or suburban area The USDA has an online tool where you can enter any address to check if it qualifies. Generally, homes outside of major metro areas like Atlanta are eligible
Income Limits: Your household income must fall under the income limits set by the USDA for your county. These vary by area but are typically quite reasonable for low-to-moderate income borrowers.
Credit History: You’ll need a minimum credit score of 640 to qualify for the best USDA interest rates. Lower scores may still be approved but with higher rates.
Debt-to-Income Ratio: Your total monthly debt payments plus new mortgage payment must not exceed 29% of gross monthly income for approval.
Citizenship: At least one borrower on the loan must be a U.S. citizen, U.S. non-citizen national, or Qualified Alien.
As long as you meet these requirements and a few other basic criteria, you should be eligible for a no down payment USDA home loan in Georgia!
Why Choose a USDA Mortgage?
There are many excellent benefits that come with a USDA-backed purchase loan:
-
100% Financing – The main appeal of the USDA loan is the ability to buy a home with zero down payment required. This removes the #1 barrier to homeownership for most borrowers.
-
Low Rates and Costs – USDA loans often have lower interest rates than conventional loans. You’ll also benefit from low upfront costs since no down payment is required.
-
Flexible Credit Guidelines – The USDA has more flexible credit requirements than conventional loans, making it easier for those with limited credit histories to qualify.
-
No Monthly MI – No monthly mortgage insurance payments are required, saving you hundreds per month. A small upfront funding fee is charged.
-
No Income Limits for Refinancing – Existing USDA loan borrowers can refinance even if their income now exceeds limits.
For eligible borrowers, a USDA home loan can make buying a home much more affordable.
How to Apply for a USDA Loan in Georgia
If you want to move forward with a USDA mortgage, the next step is to complete an application through an approved USDA lender. Here is the general process:
-
Contact USDA lenders in your area and compare loan options. Narrow down to 2-3 favorites.
-
Choose a real estate agent and start your home search. Focus on USDA-eligible rural areas.
-
When you find a home, make an offer contingent on financing approval.
-
Work with your selected lender to fill out a USDA loan application and submit all required documents.
-
The lender will order an appraisal and underwrite your full application file for approval.
-
Once approved, you can move forward to close on your new home!
Be sure to ask lenders about all costs involved so you can budget accordingly. The USDA does not charge application fees so you mostly just pay for the appraisal and other third-party closing expenses.
Our company has helped over 600 families in Georgia get USDA approved and find their dream homes. Feel free to get in touch if you have any questions!
USDA Loan Limits and Interest Rates in Georgia
The maximum loan amount you can borrow with a USDA loan depends on which county the home is located in. Here are the latest limits as of June 2022:
- Metro Atlanta Counties: $420,680
- Other Georgia Counties: $356,500
So in most counties outside of Atlanta, you can purchase a home up to $356,500 with 100% financing through the USDA program.
Interest rates on 30-year fixed USDA mortgages are currently around 4.25% for qualified applicants with good credit. Actual rates vary by lender and your personal credit profile.
Both the loan limits and average interest rates are considered quite reasonable for a no down payment mortgage option.
USDA Direct vs Guaranteed Loan Comparison
The USDA actually offers two types of home loan programs in Georgia:
USDA Direct Loan – Funded entirely by the USDA and issued directly to borrowers by local Rural Development offices. Best for low-to-moderate income borrowers.
USDA Guaranteed Loan – Issued by private lenders but guaranteed by USDA against default. For moderate income borrowers.
The table below compares the key differences:
| Loan Feature | USDA Direct Loan | USDA Guaranteed Loan |
|---|---|---|
| Income Limits | Must be low income | Moderate income limits |
| Max Loan Amount | $356,500 | $420,680 |
| Available Funds | Limited | Widely Available |
| Interest Rates | 1% to 4.75% | Varies by lender |
| Downpayment | None | None |
| Credit Requirements | Very flexible | Must meet GUS approval |
In most cases, the Guaranteed loan program will be a better fit for Georgia homebuyers. But the Direct option is great if you need the most flexible terms or affordable rates.
Reach out to USDA lenders to see if you qualify for either program. Having both available increases your chances of 100% financing approval!
First Time Homebuyer Tips and Programs
Purchasing your very first home can be an intimidating process. Here are some useful tips for Georgia first-time buyers:
-
Get Pre-Approved First – Being pre-approved shows sellers you’re serious. It also lets you know your budget.
-
Add Up All Costs – Calculate not just your mortgage, but home insurance, property taxes, HOA fees and other costs to get a full budget picture.
-
Inspect Before Buying – Hire a professional home inspector to avoid expensive surprises after moving in.
-
Check for Grants – Georgia offers the Georgia Dream Homeownership Program that provides $7,500 grants for downpayment and closing costs.
-
Know Your Credit – Get a free copy of your credit report so there are no surprises during the mortgage application.
-
Ask About Discounts – Many realtors and lenders offer special discounts for first-time buyers.
The USDA home loan program is designed specifically to help first-time buyers achieve the dream of homeownership. Our experienced loan officers are ready to guide you through every step of the process from application to closing.
Start Your USDA Loan Journey Today
Our Georgia-based USDA mortgage specialists have over 15 years experience helping buyers across the state get approved and find the perfect home. We’re ready to help you navigate the USDA loan process from application through closing.
To get started or ask any questions, feel free to give us a call at xxx-xxx-xxxx or fill out our online info form. We look forward to helping you join the ranks of satisfied USDA homeowners!
Private Mortgage Insurance (PMI)
All USDA loans come with Private Mortgage Insurance (PMI). This amounts to 1% of the home value at closing and 0.35% per year, spread over monthly payments. Thanks to PMI, the Department of Agriculture can continue supporting USDA loans for Americans.
Borrowers must have steady employment over the previous years before applying for a USDA loan. Monthly mortgage payments should ideally be under 29% of your income.
No down payment necessary
Compared to a VA home loan, USDA rural housing loans do not require a down payment. That’s vital financial relief for borrowers who find it hard to save money ahead of their home purchase. Without a down payment, households can better afford a home for their family.
With an option to incorporate closing costs into your Georgia USDA home loan, you’re granted additional financial flexibility. Closing costs often amount to up to 6% of the home value. Instead of paying that sum in cash, you can roll it into the loan and spread it through your monthly payments.
Buying a House Using USDA Rural Development Loan ($1,000 DOWN)
What is the USDA Rural Development home loan program?
The USDA Rural Development Home Loan program has been instrumental in transforming the homeownership dreams of numerous families in Georgia into reality. USDA loans, backed by the United States Department of Agriculture, enable you to acquire a home in designated locations without an initial payment.
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.
What types of mortgage programs does USDA Rural Development offer?
Buyers should note that USDA Rural Development offers two different types of mortgage programs. The USDA direct program and the 502 Guarantee program. The USDA direct program is processed directly by the USDA. The 502 Guarantee program is processed only by approved lenders and banks.
How much is a rural home worth in Georgia?
The typical appraised home value was around $111,807. On average the rural home size purchased with this loan was approximately 1,647 square feet. The size of Georgia is roughly 153,910 square kilometers. USDA defined regions of rural loan ineligibility in Georgia cover 16,447 square kilometers of the state.