What Is an RD Loan?

What Is an RD Loan?

An RD loan, also known as the Rural Development Loan or a USDA loan, is a home loan program insured by the government that allows buyers to purchase a house with no down payment. The RD loan provides qualified buyers with 100 percent financing and a low fixed interest rate.

As of 2014, to qualify for the RD loan, home owners need to pass eligibility tests in the three categories of credit worthiness, USDA loan income restrictions and location of the home that is to be purchased. The RD loan is only applicable in locations that have been designated rural areas by the USDA.