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.
Why Should I Choose a USDA Rural Development Loan in Georgia?
Appealing interest rates
With the backing of the U.S. Department of Agriculture, USDA loans come with lower interest rates compared to conventional loans. This makes it easier for a first-time home buyer to repay a mortgage and ultimately pay less in interest charges.
USDA interest rates are also fixed. The monthly mortgage payment doesn’t change and it’s easier for borrowers to project their financial planning.
Georgia USDA loan for low to average incomes
USDA rural loans are primarily focused on helping families on average or low income. There is an upper-income requirement for borrowers instead of a lower one. The range of income depends on the county and household size.
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.
Closing costs financed
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.
USDA Loan Requirements and in Georgia: Key Criteria
What do you need to get a USDA loan in Georgia? Here are the main requirements.
A 620 or above credit score is required to secure a USDA loan with a low-interest rate. A low-interest rate on your mortgage means smaller monthly payments.
USDA approved rural areas
USDA loans are given for home purchases in rural areas. The US Department of Agriculture has designated specific areas that qualify as rural. Some of them are close to major Georgia cities, so it shouldn’t be hard to find the right one for you, especially given Georgia’s expansive rural areas.
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.
USDA income limits in Georgia
Your income should align with USDA loan limits, which vary according to the county and household size. For the year 2023, the income limit in Georgia is $110,650 for a household of 1 to 4 members and up to $146,050 for larger households.
Debt-To-Income (DTI) Ratio
Society Mortgage and other lenders want your debt-to-income ratio to be under 41%. This gives you enough financial space to pay off your mortgage safely without lowering your living standards.
A USDA Loan is only for primary residences
USDA loans are restricted to your primary residence. You can’t get a USDA loan for a vacation home or an investment property and you must show proof that you will be staying in your home.
Eligibility For a USDA Loan in Georgia
What are the steps you need to take to secure a USDA loan in Georgia?
Manage your finances and whenever possible pay off debts and credit cards. It will give you the breathing space you need to repay your mortgage without carrying over any previous debts.
Loan application submission
Through a USDA-approved lender like Society Mortgage, you can apply for a USDA loan and have all the necessary documentation ready.
Society Mortgage loan officers will assess your financial status to determine whether you qualify for a USDA loan.
An authorized USDA appraiser ensures the property complies with specified standards. USDA loan safety standards are specific: the home you plan on purchasing must cover specific sanitation and safety guidelines.
Close the deal
Once you have the right property, you are ready to finalize your loan and become a proud Georgia resident.
Want to know if you are eligible for a USDA loan in Georgia? Please contact us through our Mortgage specialists 7 days a week or connect with us through our social media channels!
Frequently Asked Questions
Generally, USDA-defined rural areas, especially in Georgia, include towns and regions with populations fewer than 35,000, though exceptions and more specific criteria might apply. Many of these areas are located close to major cities while others benefit from the beauty of uninterrupted countryside.
USDA loans do not impose prepayment penalties. This gives you the flexibility to pay off your home loan early without additional charges.