We have a ton of inquires from folks who start the conversation with... "I want to buy a home in NC, but..." often times we find that what's holding them back is CASH in their back pocket. With the rough times of the past few years, it's not surprising that fewer parents have the extra cash to contribute a large downpayment! That's why we are doing more USDA Home Loans! Did you know that ALL of Johnston County qualifies for USDA Home Loan, no money down financing??
Basic Eligibility For USDA Home Loans in NC:
- You must have the ability to personally occupy the dwelling - this is not a second home, and unfortunately, this is not the program for you if you won't be moving to NC for another year or more.
- Be a citizen of the United States or be admitted for permanent residency
- Non-occupant co-borrowers are not permitted - we do offer non-occupying co-borrower loans, but that is done through FHA.
- Generally, borrowers must sell their existing home – although, if it is a Company Directed Relocation, and you can not logically commute, you may be able to keep the existing home. We've had this work for someone with some equity in their current residence... and we've seen where it did NOT work for someone who had 2 other houses, and zero equity. It's a case by case basis.
Income Eligibility USDA Home Loans NC:
USDA RD Mortgage Guidelines state that the:
“Applicants must have adequate and dependable income, typically with a history of 24 months.”
We have certainly made loans to students who just graduated with a degree, and found employment within their field of study. USDA Underwriters generally want to see the First Paystub prior to closing, so a Letter of Offer can get the loan approved… but you will usually have to receive your first pay check before the loan can close.
Contract Employees must generally have 2 full years of employment within the same company to be eligible for a USDA Home Loan in NC. We are quite literally treating you like a self employed borrower, so if you write off a ton of stuff - PLEASE tell us that!!
“Qualifying ratios are 29/41; however, higher ratios considered with strong compensating factors,including good credit scores (660+), stable employment history, potential for increased earnings, and ability to save.”
Compensating factors we’ve used in the past to show the “Potential for Increased Earnings” to USDA Underwriters were overtime received consistently for over 9 months, and a copy of a college degree that correlates with the current position. Remember the USDA Catch 22… Overtime that does not have a 2 year history will not be counted in the Ratios… HOWEVER, it will be calculated in the Maximum Income Numbers for that County.
Household Members: We’ve recently been asked about how to verify the number of “Household” members. If a grandmother, for instance, is living in the home – we will use their tax returns to be certain that they claim that address, and that their income (even if they are not on the mortgage) will put the maximum household income over the limit. If a College student, for instance, is living with a family member while attending school – we need to document enrollment, and that they are living there.
Student Loans: For the past few years we've counting 1% of hte balance on Student Loans as a "calculated" payment amount. EVEN if the payment was defered. This week we got a "stipulation" that said that we have to count the EXACT payment amount... we will update, once we know what the EXACT change is!