Credit history must indicate a reasonable ability and willingness to meet obligations as they become due. The following are indications of unacceptable credit history and must be carefully investigated. If loan approved through GUS, the guidelines below are not required to be met.

• More than one payment being more than 30 days late in the last 12 mos.
• A foreclosure or bankruptcy in the past 36 months.
• A judgment in the last 12 months.
• Outstanding tax liens, no matter what their age, that are currently delinquent.
• Two or more rent payment paid 30 days or more past due.
• Outstanding collection accounts, no matter what their age, that are currently delinquent.
• Previous RHS debt or non-RHS debt that resulted in a loss.
• Any outstanding judgment obtained by the United States in a federal court (other than a tax lien).

Loan terms include 100% financing, however there are closing costs associated with the loan. In most instances the seller can or will pay the part or all of the closing costs. When a seller will not pay the costs and the home appraises for more than the purchase price then the costs can be financed into the loan (not to exceed the appraised value). This means that technically a buyer can purchase a home with absolutely no money of their own.

The borrowers may not receive any cash back at closing, other than the documented amount representing costs paid in advance by the borrower from their personal funds (i.e., earnest money deposit, appraisal, credit report fees). Tax pro-rations may not be given to the borrowers in the form of cash back at closing. Any tax pro-rations resulting in cash back to the borrower must be applied as a principal reduction. The same applies to any excess funds remaining from seller paid concessions.

Most rural areas qualify for USDA financing. There are however many areas just outside major metropolitan areas that will qualify as well. These outlying areas are still considered small communities.

Allowed. The maximum number of borrowers allowed on a single transaction is four. Income from all borrowers and non-borrowers occupying the subject property must be considered when calculating qualifying income.

Generally bankruptcies are not allowed within the last 36 months.

Applicants are expected to demonstrate a reasonable ability and willingness to meet obligations as they come due. It is the underwriter’s responsibility to determine what collection accounts, if any, should be paid in full by the applicant prior to or at closing, and based on the strength of the credit profile. Evidence of meaningful financial reserves and if the account(s) have the potential to affect the lien position or diminish the borrower’s equity must be considered. The underwriting decision must be fully documented on the underwriting analysis.

There are income limits for USDA Loan borrowers. However, these income limits are set to accommodate low-to-moderate income levels.

These income limitations are based on family size, and vary by State and County. In most cases, applicants for the loans may have an income of up to 115% of the median income for the area.

To find out what the Maximum USDA Loan income limits are for your area, contact the USDA Loan Agency, or fill out the contact form on this page.

There is no difference between a USDA Loan and a Rural Development Loan. The terms can be used interchangeably.

Both USDA Loans and Rural Development Loans refer to the government guaranteed loan program that lets you borrow up to 100% of your home’s value – Meaning no down payment is required.
Benefits of these USDA Rural Development Loans include:

• No Money Down
• No Monthly Mortgage Insurance
• All Closing Costs Included in Loan
• Relaxed Underwriting Guidelines
• NO Maximum Loan Amount
• NO assets needed to qualify
• Flexible Credit Guidelines
• Competitive, Fixed Interest Rates

Any individual or family purchasing their primary residence in a qualifying rural area may be eligible for a USDA Home Loan. These qualifying areas are generally defined as being outside the city limits or consisting of a population of 20,000 people or less.
USDA Loan Eligibility Guideline
To qualify for a USDA Loan, the prospective borrower must:

• Show proper legal capacity to own property in the U.S.A
• Meet or fall beneath the income limitations
• Monthly housing costs must meet a specified percentage of gross monthly income
• Credit history must indicate an ability to meet financial obligations
• The borrower cannot currently own a home
• Individuals must have insufficient resources to qualify for a conventional home mortgage

Never assume that you do not qualify for a USDA Home Loan. Instead, contact the experts at the USDA Loan Agency. Our certified loan agents will quickly identify your needs, and offer you the type of expert advice you deserve.

There is no set maximum amount for a USDA Rural Development Loan. However, the total amount a person can borrow depends on a number of factors, including:

• Value of Home
• Monthly Income
• Debt to Income Ratio

In most cases, the maximum amount available for a USDA Loan will be equal to 100% of the appraised value of the home.

Because the eligibility requirements for a USDA Loan depend on a number of specific factors, including the county where the home is located, your current income and your credit history, it is important to work with a certified USDA Loan agent who understands your needs. For the answers to your questions, contact the USDA Loan Agency today.

When an individual or family is seeking a USDA Home Loan, the property must be used as the primary residence.

A Rural Development Loan may be used in the purchasing of:

• Condos
• Planned unit developments
• Manufactured homes
• Single family residences

Other Factors to Consider When Seeking a USDA Home Loan
Both new and existing homes are eligible. In addition, there is no restriction placed on the design, size or layout of the home. The prospective property, however, must be declared as safe, sound and sanitary, meeting all the necessary building requirements in the area.

To find out if you qualify for a no-money down USDA Loan, contact the experts at the USDA Loan Agency today!

The terms of your USDA Loan include 100% financing, with no required down payment. However, just like a traditional loan, there are associated closing costs.
To cover the closing costs on your USDA Loan, you can choose to:

• Pay all or part of the closing costs upfront
• Roll the closing costs into the overall loan.

Take note that only the difference between the agreed upon contract price and the appraised value of the home can be used to finance the closing costs when seeking a USDA Mortgage. In other words, your USDA Home loan will not cover more than the appraised value of the property.

For answers to your questions, please call the USDA Loan Agency at 1-866-854-4242 or begin the USDA Loan application process.

PMI stands for Private Mortgage Insurance.

For traditional mortgages – the lender will require homebuyers who are financing more than 80 percent of their home’s appraised value to purchase PMI. In a basic sense, buyers who do not put down at least 20 percent are required to pay PMI on a traditional mortgage.

The benefits of PMI for a traditional mortgage are two-fold:

• It protects the lender in the event that the borrower defaults on the loan
• It enable homebuyers to purchase property with less available cash

USDA Loans Do Require a Small Amount of Mortgage Insurance
When seeking a USDA Home Loan, or Rural Development Home, a small mortgage insurance is required. The insurance is much less than other loans offered. For a USDA Loan the monthly mortgage insurance is .4%

With low monthly mortgage insurance costs, the overall monthly payments on these Rural Development loans are often lower when compared to a traditional loan.

Do you have questions? Contact the USDA Loan Agency or fill out the form to your left and a Certified USDA Loan Assistant will contact you.

USDA Loans are only offered as a fixed-rate mortgage. This means that the interest remains the same throughout the entire life of the loan. Unlike a variable rate loan, the monthly payments on a USDA Home loan will always remain the same, allowing for easier planning and budgeting.

The interest rates on the loan are determined by market rates and can vary based on region or state. The payments can be spread out over a period of 33 years and typically are calculated based on a 30 year period, with payments being made on a monthly basis.

Starting a USDA Loan application is fast, easy, and best of all, free! Call 1-866-854-4242 to talk to a certified USDA Loan agent, or start the application on this page.

The process involved with a USDA Loan, at least from the buyer’s perspective, is similar to that of a traditional mortgage or FHA mortgage. From the beginning application to the approval, the timeline can take somewhere from two weeks to 30 days.

The major difference between a Rural Development or USDA loan and a traditional loan is that it must be approved by the state’s USDA representing office. For the borrower, however, this process goes virtually unnoticed, with the USDA agent taking care of most, if not all, of the necessary paperwork.

After final approval by the state’s USDA office, which typically takes around two weeks, the borrower will be notified and the paperwork can be finalized.

Are you ready to explore your USDA Loan opportunities? The experts here at the USDA Loan agency make starting the application process quick and easy. Call us today at 1-866-854-4242 or fill out the USDA Loan application to get started.

What is an FHA loan?

An FHA loan is a loan that is made by a bank but insured by the Federal Housing Administration (FHA). The FHA guarantees the bank who lends the money in case of loan default.

FHA loans require 3.5% down payment and will allow for the seller to pay some closing costs thru a process called ‘seller concessions.’ FHA loans have a mortgage insurance premium of 1% of the loan balance financed into the loan. Additionally, FHA loans carry a monthly mortgage insurance premium of .90% (in other words, you pay an additional $75. a month for ever $100,000 financed).

FHA loans have lending limits based on the county you live in, and generally require a 620 or greater credit score.

What is a Rural Development Loan?

Like a FHA loan a Rural Development Loan (also called USDA Loan) is also insured by the US Government. Rural development loans offer 100% and will allow all closing costs to be paid by the seller, or can be rolled into your loan. Rural Development loans are truly NO MONEY DOWN Loans!

Rural Development Loans have a one-time ‘funding fee’ of 3.5% that is financed into the loan amount. In addition to the 100% financing, Rural Development Loans have no monthly mortgage insurance.

Credit guidelines for Rural Development Loans are considered more relaxed that FHA Loans, and you can obtain financing for a Rural Development loan with a credit score down to 600.

Rural Development Loans           FHA Loans

• No Money Down
• No Monthly Mortgage Insurance
• All Closing Costs Included in Loan
• Relaxed Underwriting Guidelines

While areas that qualify for USDA loans are typically defined as “Rural,” many smaller communities that lie just outside major metropolitan areas do qualify. Many times the population is limited to rural areas of 10,000 residents or less. However, under certain conditions, a town or city that has between 10,000 and 25,000 residents may qualify for a USDA loan.

Check with a certified USDA Loan Representative to see if your area qualifies.

Other USDA Loan Requirements include:

• Credit History
• Type of Home
• USDA Loan Limits
• Borrower’s History
• Income

Never assume that you or your area does not qualify for a USDA Home Loan. Instead, contact the experts at the USDA Loan Agency. Our certified loan agents will quickly identify your needs, and offer you the type of expert advice you deserve.

Remember that in order to qualify for a USDA Rural Development Loan, the property must be located in a designated rural area. But don’t let the term “Rural Development Loan” mislead you. USDA Loans were designed to help build our country’s smaller communities while making land and property more affordable. This is why you might be surprised at how many areas of the United States do qualify for these no money down home loans – Some of which are located just outside of major metropolitan areas.

Other USDA Property Eligibility requirements include:

• Property must be located outside a major metropolitan area
• Community in which property resides must have a population of less than 20,000 residents

To learn if your property is USDA Loan eligible, the USDA Loan Agency is offering a unique search tool. Please visit our USDA Loan Property Eligibility page to learn more. Or, for more specific USDA loan information, contact our certified agents today.

To qualify for a USDA Rural Development Loan, your income cannot exceed the USDA income limit set for the county in which you are purchasing property.

Here at the USDA Loan Agency, we offer detailed information on state specific USDA Loan Income Limits by county. To find out the income limits set for the county in which you reside, please visit our USDA Eligibility page.

Take note that when calculating income limits, all gross household income must be counted toward the your total annual income– Meaning that if more than one person resides in the household, the income of all household members will be combined and calculated.

However, it is also important to note that there are a number of adjustments and amendments that can be factored when determining eligibility. Items like child care, medical expenses and dependents may be able to be deducted from the gross income limit. For this reason, you should never assume that you do not qualify for a USDA Home Loan. Instead, contact the experts at the USDA Loan Agency. Our certified loan agents will quickly identify your needs, and offer you the type of expert advice you deserve.

USDA Rural Development loans come with 100% financing. This means that no money down is required and closing costs can be either paid by the seller or financed into the loan.

In short, no-money-down means the homebuyer is typically not required to pay any out-of-pocket expense when the house closes. This includes:

• No PMI
• No Closing Costs
• No Down Payments

It is important, however, to note that only the difference between the agreed upon contract price and the appraised value of the home can be used to finance the closing costs. In essence this means the USDA Home loan will not cover more than the appraised value of the property.

For answers to more of your home mortgage questions, or to begin the USDA Loan application process, call the USDA Loan Agency at 1-866-854-4242 or contact us today.

Here at Society Mortgage, A trusted USDA lender, we want to be your one-stop shop – Providing you with everything you need to know about the government backed USDA Rural Development Home Loans program. Our expert staff is here to walk you through the entire USDA Loan application process. Whether you have questions about these no money down, fixed interest rate loans or are curious as to whether your property qualifies, we are here to help.

If you live in a qualifying suburban town – generally with a population of less than 20,000 – a USDA Rural Development Loan may be your answer to securing your dream home of ownership. Also referred to as Rural Development Loans, these federally backed and funded loans remain one of the last true No Money Down options on the market.

Getting started is quick secure and confidential. Simply fill out the form on this page, and our USDA Loan experts will begin reviewing your claim immediately. Or for answers to questions about eligibility, including both income and property eligibility, please visit our USDA Loan Eligibility page.

Because these Rural Development Loans are backed by the United States Department of Agriculture (USDA), it is easy to simply assume that they are intended solely for farmers.

The truth, however, is that the definition of a Rural Area by the USDA is much more broadly defined. These loans have nothing to do with agriculture and are not only intended for farmers; instead their purpose is to help build many of the nation’s smaller communities.

This simply means that in order to qualify, the property you would like to purchase cannot be located within in a city’s limits. In can, however, be located right outside of a city’s limits. Also, the population of the area must be of less than 20,000 people.

To learn if your property falls within a USDA approved area, the experts here at the USDA Loan Agency have made it easy. Check out our USDA Property Eligibility Page – and simply plug in the zip code.

For more information, and personalized expert advice, contact one of our USDA Loan agents today or call us at 1-866-854-4242.

It’s unfortunate, but sometimes having a good credit history or reliable income is not enough to qualify for a traditional loan through a traditional financial institute, such as a bank or credit union.

The United States Department of Agriculture recognizes this, and for this reason they have instituted the USDA Rural Development Loan program. Through this rural development loan program, more families and individuals who reside in some of the nation’s smaller communities are able to qualify for a loan – The end result being that these already vibrant areas grow stronger and more independent.

In short, the USDA Loan program not only helps families realize their dream of homeownership, it simultaneously serves as an economical boost for the area in which the property is purchased.

To learn more about these no money down, fixed interest rate loans, contact the experts at the USDA Loan Agency or visit our USDA Loan Eligibility page.

Thinking about apply for one the government backed USDA Loans? The following are a few highlights of the USDA Guaranteed Rural Housing Loan Program:

• USDA Loan Value: Loans may be for up to 100 percent (102 percent if the guarantee fee is included in the loan) of appraised value or for the acquisition
• Benefits: No down payment; Mortgages are 30-year fixed rate at market interest rates
• Closing Costs and Legal Fees: Loans may include funds for closing costs, the guarantee fee, legal fees, title services, cost of establishing an escrow account and other prepaid items, if the appraised value is higher than sales price
• Application Process: Home buyers make USDA Loan applications with participating lenders
• Living Restrictions: Buyers must personally occupy the dwelling following the purchase
• Loan Fees: For purchase loans, a one-time guarantee fee equal to 2.0 percent of the loan amount is charged to the lender. The charge for refinance loans is 0.5 percent. Typically, the lender passes on this expense to the borrower as a closing cost. After the one-time fee is paid, there is no recurring monthly expense charged for guaranteeing the loan

Never assume that you do not qualify for a USDA Home Loan. Instead, contact the experts at the USDA Loan Agency. Our certified loan agents will quickly identify your needs, and offer you the type of expert advice you deserve

USDA Mortgage Insurance

Many Buyers get confused with all the terminology referring to mortgage insurance these days. There are many types and the differences can be hard to spot.

As many know, LTV (loan-to-value) is a key term in buying a home. This is the ratio of the loan amount to the purchase price for a purchase and the ratio of the loan amount to the appraised value in a refinance. This is important to the lender because it shows the amount of equity in the home. The more equity you have in the home more likely you will be able to sell the home if needed and prevent foreclosure.

Typical conventional loans have a LTV limit of 80% meaning you need to have a down payment of at least 20%. For a conventional loan when you are at a LTV of 80% or less you have no mortgage insurance. Many buyers do not have 20% so they opt for either lower down payment conventional loans or government insured loans.

Government insured loans, such as USDA loans do not require you to put down any down payment. Because your LTV is high at, 100% they require mortgage insurance premiums to protect themselves in case you go into default.

USDA Mortgage Insurance is mandatory on all USDA loans regardless of your down payment amount. USDA does not require a down payment which is why the USDA mortgage insurance is mandatory. The majority of buyers will not put down any money and it is too time consuming for USDA to have a different amount for everyone if there is a down payment made.

USDA mortgage insurance is made up of two parts; the upfront Mortgage Insurance Premium (USDA UPMIP) and a monthly Mortgage Insurance Premium (MIP). The upfront mortgage insurance premium for a 30 year loan term is a standard 2% of your loan amount financed on top of your total loan amount. The monthly mortgage insurance premium is currently 0.40% of your loan amount financed into your monthly payment.

The mortgage insurance that USDA requires is still much less than what you would need to pay for FHA Mortgage Insurance or any conventional loans that do not have at least a 20% down payment. This is a great way to keep your payment lower without being required to make a down payment of 20%.

USDA Loans & Student Deferments
USDA has a non-standard approach to student loans that have deferred payments. Most other loan programs will remove the payment if the student loan is deferred for at least 12 months from the closing date. USDA will not remove ANY student loan payments from your debt to income ratios. This means you must qualify for the loan with the payments for the student loan included even though they may be deferred.

For example, Ms. Smith has a student loan that is current deferred. The minimum payment on the loan when out of deferment will be $100. USDA will require that $100 payment be included in her debt to income ratios even though she is not obligated to pay on it when she applies for the loan.

For the USDA Rural Development Single Family Housing Guaranteed Loan Program, deferred student loans should be included in the debt ratio calculations for Guaranteed Loans regardless of the deferment period. Rural Development RD Instruction 1980-D, section 1980.345(c)(1) states: “Long term obligations include those obligations . . . with a remaining repayment period of more than 6 months and other shorter term debts that are considered to have a significant impact on repayment ability.”

Deferred student loans are long term obligations with remaining repayment periods of more than 6 months, and they must be included as part of the applicant’s recurring monthly debt obligations. If the credit report does not reflect a monthly payment due at the end of the deferment period, the lender may request a copy of the applicant’s payment letter, or utilize the industry standard of estimating student loan payments as 1% of the loan balance. Therefore a deferred student loan balance of $12,000 should have a corresponding monthly payment of $120 if no estimated payment is verified by the lender. This guidance applies to all manually underwritten loan files as well as loans submitted through the Guaranteed Underwriting System (GUS).

As with all loan scenarios, you should contact one of our knowledgeable loan officers immediately to determine if student loans will affect the amount you may qualify for. If you have student loans showing on your credit report with more than 6 payments left, they will need to include a payment for them. This can severely limit the amount of a loan you can qualify for.

The answer to this is simple: Rural Development Loans (also referred to as USDA Home Loans) are one of the last true 100% financing, no money down loans.

Benefits of a Rural Development Home Loan include:

• No down payment
• No private mortgage insurance (PMI)
• Fixed Interest Rates

It’s that straight forward. Backed by the federal government, a USDA Rural Development Loan lets you finance 100% of your home’s value, roll any closing costs into the loan, all while benefiting from an insured government loan with a low fixed rate.

With the aid of a USDA Home loan, you can finally realize your dream of homeownership without incurring any upfront financing fees. Better yet, because they are offered at a fixed rate, you monthly payments will never change.

With our expert staff guiding you through the entire application process, applying for a USDA Loan is fast, easy, and secure! To learn more, or to start the application, contact one of our USDA Loan agents today or call us at 1-866-854-424