If you build it, big savings will come.
You could build your dream home with more room to grow — and with as little as $0 down.1
Rural Development Construction Mortgage: Features & Benefits
We’re experts in our field. You want to build a home in yours. A Rural Development Construction Mortgage, also known as a “USDA construction loan,” can make it happen with up to 100% financing.
0% down
100% financing and great rates on a 30-year fixed mortgage means you could build with $0 down.1
Income based
USDA loans are designed to help more families achieve homeownership in designated areas.
One-time close
Save on closing costs by smoothly transitioning your construction and land loans into a mortgage.
Rural Development Construction Loan Requirements
Good builds start with solid blueprints. To qualify for a USDA Rural Development Construction Loan through LMCU, you must meet these requirements.
Income eligibility
The USDA sets area income limits for loan eligibility. Consult their website for more information.
Residence status
You must list your planned home as your primary residence.
Property criteria
Ensure you meet all criteria set by the USDA and your state’s housing development authority.
Rural Development Construction Mortgage FAQs
A Rural Development Construction Mortgage, also known as a USDA construction loan, is a government-backed home loan that helps prospective homeowners in eligible areas build a home without a down payment.
At LMCU, we simplify things further with our signature one-time close. Instead of needing separate loans for land, construction, and your primary mortgage, we combine everything into a single loan with one closing, saving you money on closing costs.
No, the main benefit of a Rural Development Construction Mortgage from the USDA and LMCU is 100% financing1.This means that buyers are not required to provide a down payment!
Since Rural Development Construction Mortgages are designed to help more families achieve homeownership in rural areas build homes, there are income and location requirements in order to be eligible.
To qualify, borrowers must:
- Meet income eligibility requirements
- Your eligibility depends on how your household income compares to the average for your area. Typically, the USDA requires that your household income does not exceed the area median income, but we recommend that you consult the USDA for specific limits in your area.
- Build or buy in a USDA-eligible rural location
- Consult the USDA for up-to-date information on eligible properties.
- Use the home as a primary residence
No, Rural Development Construction Mortgages are available to all homebuyers who meet the program’s income and property eligibility requirements.
Rural Development Construction Mortgages uses a construction-to-permanent structure with a one-time close, meaning that your loan’s approved funds are used to purchase land and build your new home.
Once construction is complete, the loan automatically converts into a 30-year fixed-rate mortgage. And since everything is handled in one loan, you avoid multiple closings and additional fees.
In addition to our signature one-time close approach to construction loans, we also maintain strong relationships with top builders. This allows us to:
- Connect you with the best builder for your project, if you don’t already have one in mind.
- Simplify the activation process, reducing paperwork and hassle for both you and the builder. That way, work can start — and finish — sooner.
Save even more with LMCU’s Max Mortgage discount!
Building a home? Start here.
Connect with one of our local mortgage experts. They’re ready to answer any homebuying questions you may have with a smile and an extra mile.
The home of all your homeownership needs.
Disclosures
For well qualified borrowers. The interest on the portion of the loan that exceeds the value of the dwelling is not tax deductible. Please consult your tax advisor. 10% contingency reserve required.
To receive MaxMortgage discount, mortgage payment must be an automatic payment that comes from an LMCU checking account with an ACH deposit. Some programs may not be eligible, discuss with your mortgage loan officer for further details.
