Conventional Loan vs. USDA Loan

A conventional loan is a type of mortgage loan that is not guaranteed or insured by the government. These loans are typically issued by private lenders, such as banks or credit unions, and have stricter lending requirements than government-backed loans.

On the other hand, a USDA loan is a type of government-backed mortgage loan that is offered by the United States Department of Agriculture (USDA). These loans are designed to help low- and moderate-income individuals buy homes in rural and suburban areas. USDA loans have more relaxed credit and income requirements, and often feature lower interest rates and no down payment.

In general, a conventional loan may be a better option for borrowers with a higher credit score and a larger down payment, while a USDA loan may be a better option for borrowers with lower credit scores or limited funds for a down payment. It's worth noting that USDA loan are only available for properties located in rural areas and have restrictions on income, which also limits the property price.

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