What is the maximum loan-to-value (LTV) ratio for a USDA loan?

The correct answer is that the maximum loan-to-value (LTV) ratio for a USDA loan is 100%. This characteristic of USDA loans is particularly beneficial for homebuyers because it allows them to finance the entire purchase price of the home without having to make a down payment.

This feature is designed to promote homeownership in rural areas by minimizing the initial financial barriers for potential buyers. By having an LTV ratio of 100%, borrowers can take advantage of increased accessibility to home finance options, especially for those who may not have significant savings for a down payment. This aligns with the USDA's mission to improve the economy and quality of life in rural America by facilitating home purchases.

Other options reflect common LTV ratios for different types of loans in conventional lending practices but do not apply to USDA loans, which are structured to support 100% financing. The other percentages mentioned are typically associated with FHA loans or conventional loan products that require some form of down payment from the borrower.