USDA loans? Are they beneficial?

[David Galvan]

Hello BP. Would you recommend using USDA loans for investing?

[Chris Gillins]

David Galvan there are two types of loans, direct and guaranteed. Direct, you are securing a loan from the USDA, guaranteed the loan is from a traditional lender, but backed or guaranteed by the USDA. With direct there is a waiting list, depending on the state you live in, you could be waiting for a while for money to come down from congress. From what I've heard, you have to live in the home as your primary residence for 1-2 years before you can sell. With the direct loans, if your income qualifies the USDA sometimes will pay a subsidy on the interest, which can lower the monthly payment, but I've heard that having that on the loan can make things very difficult when going to resell. Just make sure you go over the loan with a mortgage broker you trust and secure a loan with no pre-payoff penalties.