La Crescent, MN USDA Home Loans vs La Crescent, MN FHA Home Loans: Which is Right for You?
Homeownership is a dream for many people. To make it achievable for a wider range of individuals, there are various mortgage programs available. Among the most popular are USDA Home Loans and La Crescent, MN FHA Home Loans. Both of these loan programs aim to assist buyers, especially those with low-to-moderate incomes, but they serve different populations and have distinct criteria. Let’s delve into the differences and similarities of these two loan types to help you decide which one might be right for you.
La Crescent, MN USDA Home Loans
1. What it is: The La Crescent, MN USDA Home Loan program is backed by the United States Department of Agriculture (USDA). It’s designed to help rural residents, especially those with lower incomes, purchase homes.
2. Eligibility:
- Location: Homes must be located in eligible La Crescent, MN rural areas as defined by the USDA.
- Income limits: There are maximum income limits, which vary based on the size of the household and the county in which the property is located.
- Credit score: While the USDA doesn’t have a set credit score requirement, most lenders require at least a 640 score.
3. Benefits:
- No down payment: USDA loans allow for 100% financing.
- Competitive interest rates: Often lower than conventional loans.
- Low mortgage insurance: The upfront guarantee fee can be rolled into the loan, and the annual fee is generally lower than FHA mortgage insurance.
4. Limitations:
- Geographic restrictions: The program is limited to certain rural areas.
- Income caps: Not suitable for those with higher incomes.
La Crescent, MN FHA Home Loans
1. What it is: FHA Home Loans are backed by the Federal Housing Administration (FHA). This program aims to help those with low-to-moderate incomes and La Crescent, MN first-time homebuyers purchase homes.
2. Eligibility:
- Credit score: Borrowers need a minimum credit score of 580 to qualify for the 3.5% down payment. Those with scores between 500-579 can still qualify but will need a 10% down payment.
- Debt-to-Income Ratio (DTI): Generally, the ratio should be less than 43%, but exceptions can be made with compensating factors.
- Mortgage Insurance: Borrowers are required to pay both an upfront and an annual mortgage insurance premium.
3. Benefits:
- Low down payment: Requires only 3.5% down with a 580 credit score.
- Flexible credit requirements: Suitable for those with lower credit scores.
- Assumable mortgage: An La Crescent, MN FHA loan can be assumed by a future buyer, which can be a selling point in a rising interest rate environment.
4. Limitations:
- Mortgage insurance: FHA loans come with both upfront and ongoing mortgage insurance premiums.
- Loan limits: There are maximum loan amounts, which vary by county.
Which is Right for You?
Your decision between a USDA Home Loan and an La Crescent, MN FHA Home Loan will largely depend on your individual circumstances:
- Location of Desired Property: If you’re looking at a home in a rural area, the USDA loan might be the best fit. If you’re considering urban or suburban areas, an FHA loan may be the only option among the two.
- Down Payment: If you don’t have a down payment, a USDA loan, with its 100% financing, can be attractive.
- Credit Score: If you have a lower credit score, the FHA loan might be more forgiving.
- Income: Remember that USDA loans in La Crescent have income caps which could rule out higher earners, while FHA loans in La Crescent, MN do not.
To make the best decision, consider speaking with a mortgage professional who can provide advice tailored to your situation. Both La Crescent USDA and FHA loans offer opportunities for homeownership, but the right one for you will depend on your personal and financial circumstances. Questions about the La Crescent, MN USDA and FHA loan options? Call today (888)416-4805.
We service the following areas for FHA and USDA loans.
Learn more about La Crescent
La Crescent (/lə ˈkrɛsənt/ lə KRESS-ənt) is a city in Houston and Winona counties in the U.S. state of Minnesota. The population was 5,276 at the 2020 census.
La Crescent is located in the northeast portion of Houston County; the northern edge of the city falls into Winona County. The city is known as the “Apple Capital of Minnesota” because
John S. Harris planted apple trees here, resulting in many orchards in the present-day city. It is recognized as a ‘Tree City’ by the Arbor Day Foundation, and a ‘Minnesota GreenStep City’ by the Minnesota Pollution Control Agency.
Lying on the west bank of the Mississippi River, the city is surrounded by bluffs with views of the river and abundant wildlife. Humans have inhabited this area for thousands of years. The most recent inhabitants before the arrival of white settlers were the Dakota people, a branch of the Sioux, and the Ho-Chunk, or Winnebago.
Following the 1803 Louisiana Purchase, Nathan Boone, youngest son of Daniel Boone, was among the early surveyors of this area. The various Indian tribes who had lived here were forced out and relocated in the 1840s to accommodate white settlement.
La Crescent was founded in 1851 by Peter and Emma Cameron, who called it “Camerons”. The Camerons were two of the town’s most colorful characters; he tried to dig a canal to change the flow of the Mississippi River so it would flow closer to La Crescent and bypass La Crosse, Wisconsin across the river. He died 10 weeks before its scheduled completion in 1857, and the canal was never finished, although the canal can still be seen in aerial photographs of the city. The Presbyterian missionary Sheldon Jackson lived in La Crescent prior to 1872, when he moved westward to Denver and later Alaska.