What Are the Downsides of a USDA Loan?
What Are the Downsides of a USDA Loan?
Abstract
The downsides of a USDA loan include geographic restrictions, as they are only available for properties in rural areas. Income limits are also in place, and borrowers must have low-to-moderate incomes to qualify. The program also requires an annual mortgage insurance premium and has a 12 month waiting period for refinancing. The property must also meet the USDA's requirements and HUD's minimum safety standards, which can delay the process if issues are found during the appraisal. Additionally, USDA loans can only be used to purchase a primary residence and cannot be used for second homes or investment properties.