School me on USDA Loans (insurance, loan, interest rate, premium)

[mbpharoh]

Hi All,

Have you had experience or background knowledge of USDA loans? I have started doing some reading online, but the information varies from each page that I am on.

I am in the early stages looking for a home, I wanted to know the difference between USDA, FHA and traditional and what are the pro/cons based on each loan option.

[LifeIsGood01]

USDA is only for rural properties. You have to check the website to make sure your property falls into an area that is classified as rural. Some lenders do USDA loans, but a direct USDA loan should cost less. No down payment is required and you can add the mortgage insurance to the loan, closing costs can be included in the loan too. You can finance 100% or more if you add in closing costs and MIP. The interest rates are lower than regular loans too.

I would Google and read up on them, there is a lot of info online to learn about them.

Conventional, if you can get it is your next best move. FHA is used when you can't qualify for conventional and it has mortgage insurance premium for the life of the loan.