USDA Rural Housing Loans - More People Will Now Qualify!!!

Mortgage and Lending with Guild Mortgage Co - Oak Harbor WA

Sue Botelho is a very well informed lender in the Florida panhandle. She has researched this information very well and it appears best just to pass it on. This could make some huge differences in Oregon. Most of the state has these same income limits. Thanks for the information Sue.

Original content by Sue Botelho

Today, the final ruling was published to simplify the USDA Rural Housing program's income limit structure for the USDA Guaranteed Rural Housing Program.  These income structural changes will become effective on January 20, 2009, unless they receive adverse comments by January 5, 2009.  They had put an advance notice out about trying to do this on April 10, 2008 and have not yet received any adverse comments so this should be a non-issue.

In essence, the current income limit structure that is based on household incomes from one to eight persons (in the household) would be restructured as follows:

1-4 person households will be qualified using only the 4-person limit and 5-8 person households would be qualified using only the 8-person limit.

What does this mean?  It means that a lot more people will be able to qualify for this program! Currently, most counties in Florida have the following income limits in place:

1 person $49,550   2 person $56,600   3 person $63,700    4 person $70,750

5 person $76,400    6 person $82,050    7 person $87,750    8 person $93,400

Under the new rules, the following would be the norm:

Any household having between 1 and 4 persons living in it would have max income of $70,750

Any household having between 5 and 8 persons living in it would have max income of $93,400

As you can see, this will certainly help to qualify a lot more people into a rural housing loan!

I have had clients that were single that made $54,000 and were only $4,450 above the 1-person limit but because they were over at all, were not able to qualify.

As a buyer, this is an opportunity to buy real estate with NO MONEY DOWN and qualify with higher income limits!

As a Realtor®, this is a HUGE opportunity to sell homes with no money down to people with much higher income levels!

At this point, we are not using these levels but in order for us to be able to use these changes, the new income limits must be approved and in use at the time our files are sent to the USDA Rural Development office.  Currently, the earliest date for that occurring is January 20, 2009.

If you have buyers sitting on the fence, it is certainly possible to have them write contracts that don't close until January 21, 2009 and allow your buyers to get the benefit of this program.  And if it's a short sale, it may take that long anyway!

We are a National Trainer in this program and would love to work with your buyers if you are a Realtor®.  If you are a buyer looking for financing, please know that we are experts in Florida, Alabama, Georgia, North Carolina, South Carolina and Tennessee for this program and we can secure this financing for you.  Please feel free to contact me or to have your clients contact me

Comments (7)

Stephen Kappre
KW Hometown - Mantua, NJ
Helping You Home

Fred - I always enjoy your posts. A USDA rep told me about this a few weeks ago - great to hear it was passed!!

Also, I'm sharing because this may help. I had a USDA scenario today.  Great candidate.  All ratios met.  But the house they were buying was affordable housing (COAH). By the COAH guidelines, there would be an issue if the mortgage wasn't paid, since only certain people can retain ownership of the property. So I couldn't do the loan as USDA.  It will get done FHA with county grant money. Nonetheless, you might run into such a scenario in the future.

Nov 05, 2008 06:36 AM
Greg Nino
RE/MAX Compass, formerly RE/MAX WHP - Houston, TX
Houston, Texas

Fred - how is any one person able to keep us with all this gooey stuff!? Are they doing this in Texas?

Nov 05, 2008 07:12 AM
Fred Chamberlin
Guild Mortgage Co - Oak Harbor WA - Oak Harbor, WA
Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant

Absolutely Greg. This is a national program and is available in any rural area....basically described as less that 30k in the city. Check their website for a specific website. You can find it here. I read a lot and have a lot of notification programs that keep me up on things.

Nov 05, 2008 11:49 AM
Timothy Butterworth
Taking a break - Portland, OR

I like this program, for those that want to get a little outside the city it looks like it would work very well. If i understand the loan right it can apply to farms also?

Nov 05, 2008 04:16 PM
Fred Chamberlin
Guild Mortgage Co - Oak Harbor WA - Oak Harbor, WA
Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant

Sorry Tim, it doesn't work on farms, unless they are a hobby farm. Most of the tri-county area is not available. But if you check the link just above, you can check out individual addresses.

Nov 05, 2008 04:34 PM
Sandy Shores FL RealtorĀ®, Melbourne Real Estate
M & M Realty of Brevard Inc. - Melbourne, FL
Brevard County Real Estate, Florida's Space Coast

Hi Fred, Good news for buyers.  Thanks for the great information - no money down.  How can you beat that?  I hope that you are doing well.

Nov 05, 2008 11:58 PM
Fred Chamberlin
Guild Mortgage Co - Oak Harbor WA - Oak Harbor, WA
Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant

I am, thanks Sandy. You are right, great program.

Nov 06, 2008 03:59 AM