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The Best Mortgage Lenders for USDA Loans in Texas

September 28, 2022 | By Shoshana Simones
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Buying a home is likely the single biggest purchase you'll make in your lifetime. So you want to make sure you get it right by choosing the right type of loan and the best lender!

So if you are looking for a mortgage in Texas, you may want to consider a USDA loan. USDA loans are offered by the United States Department of Agriculture, and they are designed to help people in rural areas purchase homes.

We will discuss the best USDA mortgage lenders in Texas. We will also talk about what makes these lenders the best choice for your next home purchase!

What is a USDA Loan?

The best way to describe a USDA loan is that it is a government-backed loan available to people looking to purchase homes in rural areas. These loans are available because the USDA wants to help people who live in rural areas have access to homeownership.

How Can I Be Eligible for a USDA Loan?

There are three main factors that will determine if you are eligible for a USDA loan: your income and credit score, as well as where you want to buy the home.

Income

In order to be eligible for a USDA loan, you cannot make more than 115% of the median income in your area. FHA loans are also common for first-time home buyers but do not have income maximums.

The current (2022) standard USDA loan income limit for a household of 1 to 4 members is $103,500, up from $91,900 in 2021. The updated 2022 limit for a household of 5 to 8 people is $136,600, up from $121,300 last year.

Credit Score

In order to be eligible for a USDA loan, you typically must have a credit score of 640 or higher. However, the USDA doesn't have a fixed credit score requirement. Thus, you may qualify for a loan with a lower score.

Most USDA lenders will require a score of at least 640. This is the minimum threshold to qualify for automatic approval through the USDA's automated loan underwriting system.

Location

In order to be eligible for a USDA loan, the home you are looking to purchase must be located in a rural area as designated by the USDA. But don't worry, many areas of Texas are covered! You can check the USDA website to see if your zip code is covered.

Benefits of Getting a USDA Loan

There are several benefits that come along with getting a USDA loan.

No private mortgage insurance

 One of the best benefits of USDA loans is that you will not be required to pay private mortgage insurance. VA loans also don't require PMI, but most FHA loans do.

Better rates

Another great benefit of USDA loans is that you may be able to get a lower interest rate on your loan.

No down payment

One of the best benefits of USDA loans is that there is no down payment required! You can still make a down payment to lower the overall amount of your loan and your monthly payment, but you won't be required to put down a specific amount of cash for the purchase.

Best USDA Mortgage Lenders

Now that you may feel ready to pursue a USDA loan let's talk about some of the best mortgage lenders in Texas.

Wells Fargo

Wells Fargo is a large bank that offers USDA loans in Texas. They have many branches located in rural areas, and they offer competitive interest rates nd other services. However, they've suspended home equity loans and lines of credit since the COVID-19 pandemic, and they don't offer home improvement loans.

PNC Bank

PNC Bank is another great choice for USDA loans in Texas. They have experience lending in rural areas, and they offer competitive interest rates. However, they don't offer in-person services in all states, and it can be tough to get direct customer service when you need it.

Rocket Mortgage

Rocket mortgage makes applying for USDA mortgage loans simple with their online process. However, with no local branches and no alternative credit sources considered, this isn't always the best bet for rural buyers.

Texas United Mortgage

Texas United Mortgage offers a range of home loans, including USDA loans. Their local Texas staff is well-versed in Texas real estate and works to help their clients feel fully informed and engaged in their USDA mortgage loan process.

Working with a Local Texas USDA Lender

There are many great USDA lenders in Texas, but one of the best things you can do is work with a local lender. Local Texas mortgage lenders will better understand the USDA program in your area and how it can benefit you.

For example, when you work with Texas United Mortgage, we under the intricacies of local Texas housing markets as well as the options for government-backed loans. So we can help you get the best deal and the most house for your money. Plus, we have a knowledgeable staff ready to answer any questions you may have about the loan process.

When you are ready to start looking for a home, make sure to contact your local Texas USDA lender! They will be able to help you through the entire process and make sure you get into the home of your dreams!

USDA Lenders Conclusion

When it comes to finding the best USDA mortgage lenders, you may need to reach out to a few until you find the right fit. Remember, buying a home is a big deal, and you shouldn't feel forced or uncomfortable. At Texas United Mortgage, our USDA loan lenders are experienced and supportive because our goal is to give every buyer the best experience possible.

If you have any further questions, please don't hesitate to reach out to us. We would be more than happy to help. Ready to start the process of finding your dream home? Please contact Texas United Mortgage today! We would love to help you through every step of the USDA loan process.

 

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