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Missouri USDA Rural Development Home Loans

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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 (RD) Loan. Since then, the USDA loan has allowed over a million aspiring homeowners to obtain housing with little to no money down. This mortgage 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 its popularity is increasing daily.

Buyers are discovering an easy way to buy a home with zero down payment, low rates, and affordable payments from USDA loans 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 very competitive interest rates that stay 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. In order to learn more about areas of Missouri that are eligible for a loan, 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 monthly. The guarantee fee, which can be seen as an upfront cost in the absence of a required down payment, can be spread through the mortgage to avoid any upfront costs
  • 15 and 30-year fixed rates on a USDA Loans will never go up or down, and the USDA guarantee usually makes payments smaller than conventional loans
  • Closing costs can be rolled into the mortgage. This is yet another way the USDA Loan helps you avoid upfront costs

USDA Loan Eligibility Requirements

USDA rural development loans come with a lot of benefits; most notably, reduced costs. Before you can take advantage of the zero down payment, low rates, and affordable monthly costs, 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 consultants will work with you to make sure the property is within these areas. You must also maintain a certain 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 consultants 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 Loan

Compared to a conventional housing loan, USDA loans are much more borrower-friendly, though they are not as widely available as conventional housing 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 housing loans.

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 Housing Loans

Conventional housing 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 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 does 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

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 residences 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.

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