USDA Home Loans are the new hot product out there in the world of home loan financing. This is a very unique produce that unfortunately not everyone can qualify for as the criteria is a bit on the untraditional side compared to other loan programs, but if you are able to fit into the criteria it’s by far the best loan out there you can get into.
The basics for qualifying are pretty much in line with the other loan programs as far as credit score requirements, 620-640; length of employment required 2 year history with not more than 30 day gap between jobs; length of time required after a bankruptcy has been discharged, 2 years. Now the extra requirement is property eligibility. The property must be a single family, stick built, move in ready home; no manufactured homes. The property also must be located in a designated by the USDA rural development territory guidelines which is generally properties not located within city, metropolitan areas or suburbs; more out in country areas with smaller populations. This does vary by county, by state. Each has its own designated areas.
Another qualifying factor that needs to be met is income. USDA does cap maximum income per household which also varies per county, per state, per how many members in the household. When calculating income all household members income must be accounted for, regardless if on the loan or not. The more members in household the higher the limits go.
The perk to meeting the requirements of the loan is 100% financing option with the monthly mortgage insurance fee being significantly less than other government programs which helps keep the monthly payment lower. It’s a great option for first time home buyers who do not have a lot of extra money for a down payment, yet gives them the opportunity to be homeowners.