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Requirements for the USDA Guaranteed Loan Program:
- People who apply for a guaranteed home loan from the USDA can make up to 115% of the median income for the area they are in compared to only 80% for the direct loan program. This means that the guaranteed loan program is available to people who have a higher income than is allowed under the direct loan program.
- The guaranteed loan can be used to purchase a new home, build a home, or purchase a pre-existing home and renovate. The loan money can also be used to upgrade water and sewer requirements for the property.
- There is a reasonable credit history requirement for the guaranteed loan.
- People who apply for the loan must also be in need of better housing than what they currently have.
- People who apply for the USDA guaranteed loan must be employed and show that they can afford their monthly housing expenses. This includes monthly mortgage payments, homeowner's insurance, property taxes, and other costs.
- The guaranteed loans are for a term of 30 years at a fixed interest rate set by the lender and based on the current market and other criteria.
- The home being purchased or built must be modest in size and affordable in cost. If the home is in need of repair, the costs of the repairs can be financed into the loan as long as there is an estimated cost and time frame by which the repairs will be completed.
- The home purchased through the USDA home loan guarantee program must be located in a qualified rural area. Qualified rural area is defined as open country places, and homes in cities with populations of 10,000 or less. Under certain conditions, the home may be located in towns and cities of 10,000 to 25,000 in population.
The USDA Rural Development program supplies $16 billion in funding to Americans in rural areas. One of the benefits available with USDA Home Loans is no downpayment on your home. Most people in rural areas qualify for USDA loan benefits, but people living on the outskirts of a city or in a medium sized town may also qualify.
USDA Loan Guidelines
Some of the eligibility standards that determine if you qualify for a USDA loan for your home include what county and zip code the home resides in, your current income and credit history, as well as the number of dependents you can claim. These guidelines are very specific, it is important to work with a company that has experience in dealing with USDA government financing. There are few loan options that permit no down payment - do not miss out on your chance for homeownership.
Check today to see if your house or the address you are looking at purchasing is in a USDA approved area by clicking HERE.
USDA Rural Development
