Is USDA mortgage financing the best choice?

In light of recent changes to FHA guidelines USDA is the only viable 100% financing option available in today’s mortgage lending landscape.  USDA provides 100% financing on purchases, the seller can pay the closing costs to cover closing fee’s and escrow.  The best part about USDA mortgage financing is that it has no monthly mortgage insurance.  There is a upfront rural development fee of 2.00% that is similar to the upfront mortgage insurance fee that FHA and VA mortgage loans have.  There are income restrictions based on your county for USDA mortgage loans.  This allows you as a homeowner to get into a home with at true $0 down and no mortgage insurance.

Mortgage interest rates dropped again putting the average FHA and VA 30 year mortgage interest rate at 4.95% and the average FHA and VA 15 year mortgage interest rate at 4.36%.  The interest rates on government loans today is slightly better that a Conventional loan.