The mortgage market today can be very confusing. Many people want to know, Do I qualify for a USDA loan?
Buying a home utilizing the USDA can be a very clever way to purchase a home with a program that allows you to put nothing down. That is correct, zip, zilch, nada, not one red cent in down payment money!!!
So how does it work? What are the restrictions? How do I qualify for a USDA loan?
Let's break this down into steps because there are many details you should be aware of. Do not worry to much though because there are many qualified professionals to help walk you through the process.
It is important to work with a very well qualified professional. It is recommended that you first start with a qualified Mortgage Professional because this is where the rubber meats the road in knowledge about qualifying.
The CMPS Institute is a great start. CMPS = Certified Mortgage Planning Specialist. These folks have gone the extra several miles to insure you get great service and great advice.
So how does it work?
The USDA offers what is called a loan guaranty that insures loan servicers against a certain portion of the losses in the event of a default. The USDA has certain qualifying guidelines that are quite liberal and easy to qualify for provided you want to purchase a home in the right area and fit within the thresh holds of qualifying.
What are the restrictions?
Sound complex? Wondering Do I qualify for a USDA loan? Relax, read on and rest easy. The basic purpose of USDA Guaranteed loans is to promote growth and stability in the rural parts of America. The program was built to encourage stable buyers to move to rural America providing economic stability in home ownership.
This means that only certain non urban areas of the country qualify. However, you might be surprised that most counties in the USA have some part of the county that qualifies for a USDA rural development loan. Here is an interactive map where you can see what areas near you qualify.
Income is an important factor when considering do I qualify for a USDA loan. Your income must be within 115% of the county median income in order for you to qualify. This loan is meant to promote home ownership for the under qualified so there is an income limit.
If your income is too high for the amount of family members in your household then you would not be considered under qualified. There is an easy interactive income guide when wondering do I qualify for a USDA loan.
How do I qualify for a USDA loan?
Your final step to home ownership! You can make this very easy on yourself and call a qualified Mortgage Professional and have them walk you through everything above or you can follow the steps above and pre-determine you are eligible.
Once you have determined your eligibility it is now time to qualify.
In this step you contact a qualified USDA Mortgage Professional and make a formal application. The professional will be asking for certain documentation such as, but not limited to; Tax Forms and W-2's, Recent Pay stubs, Bank Statements and any necessary income or credit documentation.
Your qualified professional will compile the information and utilize an automated program to determine you are qualified. Now you are ready to go shopping or a home! Congratulations!