USDA residential mortgage loan changes took place on May 1, 2013. The changes pertain to exceptions where the housing and debt to income ratio exceed 29 and 41 respectively.
If the applicant has a credit score of 680 or greater may be approved for a higher house ratio as high as 32% and total debt to ratio as high as 44% providing there is at least one of the following compensating factors:
- The proposed principal, interest, taxes, and insurance (PITI) payment is equal to or less than the present housing payment provided it can be properly documented for at least 12 months.
- The application will have at least three months PITI payments in savings/checking after closing. Providing this can be documented with the last two month's bank statements.
- The applicant has been employed with the same employer for the last two years and has been verified by an acceptable written verification of employment.
The USDA loan program does require that the home being purchased is in a qualifying area and the applicant and household members meeting the income restrictions.
For more information on qualifying for this loan program, please consult your licensed mortgage professional
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