Finance
A Colorado buyer is purchasing a rural property with a USDA Rural Development loan. USDA loans are available in areas with a population of no more than:
A5,000 people
B35,000 people (with exceptions up to approximately 35,000 depending on the program)✓ Correct
C50,000 people
D100,000 people
Explanation
USDA Rural Development loans are generally available in areas with populations of 35,000 or less that are not part of a major urban area, though specific eligibility varies by program and current USDA maps. The USDA has specific eligibility maps that define qualifying rural areas.
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Key Terms to Know
Debt-to-Income Ratio (DTI)
A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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