Should You Get a USDA Mortgage?

If you are considering buying a home it is important to know all your options.  I believe the USDA home loan program is one of the best products on the market because it really works for most home buyers.

Even if you are a home seller, it is just as important to know the different loan programs available so you’ll have an understanding of what each offer could potentially cost or save you if you accept it.

How do you know if you should keep reading and if USDA financing is right for you?

  • Are you a family of up to 4 with an annual income of $74,750 or less?
  • Are you a family of 5 or more with an annual income of $104,000 or less?

If you are, and you want to buy a home (and you plan on living in the home), you should keep reading and strongly consider getting qualified for USDA home financing.

USDA Guidelines and Qualifications

  • 100% Financing
  • You can still qualify even if you are not a first time home buyer!  This is not only for 1st time home buyers.
  • No Manufactured Homes.  USDA will not lend on any mobile or manufactured home.  The house must be stick built.
  • No Income producing properties. I.e. No Livestock Buildings or Barns.  The property cannot have the ability to produce income.  A detached garage is okay, and even a tool shed is okay… but USDA will not lend on any property with an outbuilding that can house livestock, horses, chickens, etc.
  • Must Be Owner Occupied.
  • Low Mortgage Insurance Premium.  You will be expected to pay a low mortgage insurance premium for as long as you have the loan.  The premium will diminish over the life of the loan and is usually about 1/3 of what a typical FHA mortgage insurance premium is.
  • Upfront Funding Fee of 2% of the loan amount.
  • Buyers with excessive cash reserves or 20% down or more may be ineligible for USDA.

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