Can I Save Money by Using the USDA Rural Development Grant Program?
Yes. Take, for example, a loan for $100,000.00. By taking out a USDA Rural Development loan, the borrower saves $4,290.00 in the first 10 years over what they’d pay out on an FHA loan. Why? For one reason – USDA RD loans don’t have any monthly Mortgage Insurance requirement! Sure, you pay a USDA Guarantee fee of 2 percent up front when you take out the loan, but that sure beats paying MI each month until you get your Loan to Value ratio down to 80 percent! Remember, it is difficult to drop MI insurance, and lenders will not drop it from your monthly payment unless you ask them to. (I know, big shock.) Plus, the MI premium has to be calculated into the ratios. This is NOT an issue with the RD loan since MI is not required. You can apply for this program here. 3. Is the USDA Providing the Funds for These Loans? No. Much like the FHA, the USDA Rural Development Single Family Housing Program functions as a backstop or safety net for mortgage lenders – in effect guaranteeing that they are p
