I wish I had a nickle for everytime I'd heard somebody tell me, "I'm just lookin' for some land." They don't really mean they want a horse farm (necessarily) but they do want some room to stretch out!
Well - good news! USDA has a 100% program for those looking for a home in a rural setting. It does NOT need to be a farm - in fact if it's an income producing farm, I'll probably have to refer you to someone who knows a lot more about Commercial loans than I do... no a USDA loan is for folks who are buying a rural home (Here's a link to where you can check and see if the home is within the USDA Footprint) and who has fairly decent credit.
Basic Qualifying Information for USDA Loans:
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Credit Scores need to be at or above 580. There are some exceptions - so if you are slightly under this let us take a peak at your credit and we'll let you know if you can close now - or if you need to do some work and close in six or eight months!
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Traditional Credit Scores are often needed. Like FHA we can "build" credit... but if your total payments are higher than an underwriter wants them, or if your income is difficult to "document" or if you have been paying $300 a month rent and now your house payment is going to be $800... the underwriter is probably going to want to see some additional credit history. If you do not have a credit score - call us and we will show you how to get this started.
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It's a 100% Loan, and you can get a gift or the seller can contribute to the closing costs. There are no reserve monies needed after closing - so it can truly be a no money out of pocket loan!
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Qualifying is based upon your gross taxable income. This means that if you earn $48,000 a year, before taxes are taken out, we are qualifying you on $4000 a month. We look at two things to see if you qualify. We want to see what percent of our total gross income is going to your house payment. So again, if we are using $4000 a month - we want to see no more than $1160 going towards the principal, interest, taxes and insurance on the loan (or 29%). The other thing we consider is what percent of your paycheck is getting spent on ALL of your bills (including the house payment). This should be no more than 41%. (Here's a link to check your household income against the USDA limits for your area)
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Childcare is considered in qualifying for a USDA loan. But it is kinda' complicated... it affects the income used for qualiying and it might mean that if you are over the income limits in your area, but you are paying child care expense - you could still qualify!
- These loans are fully documented... bring every document you think we might need to loan application! Because some folks have tried to get these loans without disclosing the spouses income (for instance - trying to "cheat the system") we normally ask for 2 years of tax returns.
To look at a map that shows all of the counties that qualify for USDA Mortgage loan financing, click here. If you want to see some of the homes in the Triangle that Qualify For USDA Financing click here!
For more information about USDA Mortgages, please contact Steve and Eleanor Thorne,USDA Home Loan Experts 919-649-5058
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Thank you for making a little-known program much clearer! Anyone looking for a USDA loan (or any other kind!) is in great hands with you...