USDA Home Loan
The USDA Rural Development are committed to helping improve the economy and quality of life in rural America. One of the many ways is the Homeownership Programs. Well built, affordable housing is essential to the vitality of communities in rural America. Housing Programs give families and individuals the opportunity to own safe and affordable homes located in rural America.
On April 30, 1935, President Franklin D. Roosevelt signed an Executive Order which established the Resettlement Administration, what we know today as USDA Rural Development. During the Great Depression, this provided aid to destitute families by helping them relocate. Since the beginning, USDA has been helping people own homes and even today continuing to offer the USDA Home Loan.
Owning a home is now well within reach for rural residents thanks to a USDA home loan. The mission statement of the USDA home loan program is “to improve the economy and quality of life in rural America.” Created by the U.S. Department of Agriculture to assist applicants in obtaining decent, safe, and sanitary housing in eligible rural areas.
Become a Homeowner
USDA loans are popular because they don’t require any down payment, so you can finance 100 percent of your home’s value. Plus, the U.S. Department of Agriculture guarantees these loans, making them attractive to both lenders and homebuyers.
USDA loans are:
- Only for first-time homebuyers
- Restricted to primarily rural areas
- For eligible homebuyers only
USDA Loans – Sometimes referred to as “rural housing loans” because the loans are guaranteed by the U.S. Department of Agriculture, USDA mortgage loans are perfect for first-time homebuyers. USDA loans have to be used for your primary residence, not a second home, and you have to meet the eligibility requirements.
Here are the main benefits:
• USDA loans do not require any down payment.
• You can finance up to 100 percent of a home’s value.
• USDA loans are restrictive in certain areas (get details)
• You may qualify for lower mortgage insurance premiums (PMIs).
How Do You Qualify for a USDA Home Loan?
Income limits to qualify for a home loan guarantee vary by location and depend on household size. To find the loan guarantee income limit for the county where you live, review this USDA Map.
USDA guaranteed home loans can fund only owner-occupied primary residences.
Other eligibility requirements include:
- U.S. citizenship (or permanent residency)
- A monthly payment — including principal, interest, insurance and taxes — that’s 29% or less of your monthly income. Other monthly debt payments you make cannot exceed 41% of your income. However, the USDA will consider higher debt ratios if you have a credit score above 680.
- Dependable income, typically for a minimum of 24 months
- An acceptable credit history, with no accounts converted to collections within the last 12 months, among other criteria. If you can prove that your credit was affected by circumstances that were temporary or outside of your control, including a medical emergency, you may still qualify.
- Applicants with credit scores of 640 or higher receive streamlined processing. Below that, you must meet more stringent underwriting standards. You can also qualify with a nontraditional credit history.
Who may apply for a USDA Home Loan?
- Meet income-eligibility
- Agree to personally occupy the dwelling as their primary residence
- Be a U.S. Citizen, U.S. non-citizen national or Qualified Alien
- Have the legal capacity to incur the loan obligation
- Have not been suspended or debarred from participation in federal programs
- Demonstrate the willingness to meet credit obligations in a timely manner
- Purchase a property that meets all program criteria
How Do You Apply for a USDA Home Loan?
At Prime Mortgage Lending, Inc. we suggest you start by talking with one of our experts to learn about your options and to begin the process. While you can apply online, there is comfort in knowing that you’ll have a direct point of contact for questions or concerns long the way.
Getting pre-qualified for a mortgage is a smart first step.
At Prime Mortgage Lending, Inc. getting pre-qualified means running and evaluating your credit report, something that usually happens only when you want to pre-apply for a mortgage. It also means you will be asked to supply your loan officer with proof of your finances. Being so thorough now saves you time later in the process. It also gives you peace-of-mind because you can rely on the amount for which you pre-qualify.
So when you are pre-qualified for a mortgage at Prime Mortgage Lending, Inc. it’s worth more than a pre-qualification anywhere else. You still get a “pre-qualification letter” that tells you how much Prime MortgageLending, Inc. is willing to loan you, and the due diligence that went into that letter means you can make an offer on a home with confidence.
Advantages of Pre-Qualification
Another advantage of getting pre-qualified for a mortgage is that the process often helps Zachery Adam and his Team determine the best type of mortgage loan for your situation. Prime Mortgage Lending, Inc. offers many different types of mortgage loans. With us, you have an ally looking out for your best interests for your mortgage.
Pre-Approval vs. Pre-Qualification
Pre-qualification at any other lender, independent or not, often is just a rough guess at how much that institution would be willing to lend you. It guarantees nothing because pre-qualification usually is based on guesses about your income, debts and assets. Prime Mortgage Lending, Inc. asks you to substantiate that information upfront so that your pre-qualification means a lot more. They prefer to leave the guessing out of the equation.
Of course, you always have the option of completing the entire pre-approval process. It does position you as a serious, well-prepared homebuyer, which will impress many sellers and Realtors. But a pre-approval takes more time than a typical pre-qualification. Pre-approval goes through the same process and requires the same documents as actually applying for the loan, but without a specific property address identified.