The way it works is quite simple. The arm of the government, the USDA has a vested interested in growing rural communities across the country.  In order for an area to flourish it will generally start with housing. Over the last fifty years rural areas have seen a decline in their economic growth rate. In order to combat this the government has rolled out this program for rural areas. The idea is, if you buy a home in any of the approved rural areas we will allow you to get a loan with no down payment. We will guarantee the mortgage so you get flexible and easy approval requirements and still get access to very low fixed interest rates.

So you can see the purpose of the USDA loan is to help all parties involved. Currently the loan program does have limited funding. Every year congress sets aside a specified amount of funds for the program. Its very important to apply and buy a home early before the program runs out of funds. Sometimes people may have to wait for funding if they procrastinate. Hopefully in the future the program will open up to have unlimited funding.

With the USDA offering 100% financing more families can own a home, more builders will develop in that community which will induce additional commercial investment that will allow the area to flourish and create job growth.