HOUSTON - If you think you'll never save enough money to buy your own home, there's a little known loan that might help. A USDA home loan. And you don't have to be a farmer, move to the countryside, or even have a down payment to get one.
"When he first brought that up, I was thinking, huh! I'm not really looking for a farm, which I thought a USDA loan was for. It was really that any property could qualify, as long as it was in a rural area," said Jacob Schlicht.
26-year-old Schlicht just bought his first home using a USDA home loan and he didn't need a down payment.
"I was able to get a cute little red brick rancher, four acres, has black fencing all around the property," said Schlicht.
"We're definitely seeing a nationwide trend of people leaving dense congested areas to get into more suburban and rural areas," said Ed Barry, CEO of Capital Bank, NA.
But you don't have to move as far out as you think. Homes qualify in areas outside the shaded areas on this USDA map.
"It's really defined by population density. That's why it really matters that it's defined at the local level," said Barry.
To qualify, homebuyers need to earn less than 115% of the area median income. That's about $90,350 for a family of four in the Houston area, and applicants generally need a credit score of at least 640.
"So it's really targeted for lower income folks. And it's really good for people that are just starting out and trying to get into their first home," explained Barry.
Schlicht says the loan enables him to start building equity while he's in his 20s.
"I'm already able to buy a home and start fixing it up and putting money into it to build equity at such a young age," he said.
USDA home loans and refinancing are available only through USDA approved lenders.
USDA also offers aid and loans to help homeowners and renters with repairs from the winter storm.