USDA Loans or USDA Rural Loans
USDA Loans is a loan where you could be 100% financing if the borrower and property meets certain requirements including the following:
The borrower must have a middle credit score of at least 620 and have no late housing payments for at least one year. If the applicant had a bankruptcy or foreclosure in their past, they must show that an acceptable amount of time has passed since then.
Middle FICO credit score of 620 or above.
No late payments in the last year.
No outstanding judgments in the last year.
All bankruptcy payments were made on time during the last year (Chapter 13).
At least three years passed since a foreclosure or bankruptcy (Chapter 7).
And since USDA loan guidelines also have maximum limits set for borrower incomes, they must also show that they don’t make too much money to qualify. The more popular Section 502 Guaranteed Loans contain maximum income limits of 115% of median household income for the area. Maximum income limits vary from county to county.
For a property to be eligible for a USDA, it must be located in an approved rural area, as defined by the USDA. The application of “Rural Area” can be quite loose and there are thousands of towns and suburbs of cities across America that are eligible for USDA financing.
The appraisal requirements for USDA loans are very similar to those for FHA loans. The requirements are so similar, in fact that an approved FHA appraiser will perform the USDA property appraisal. The appraiser will make a value assessment of the property, which must meet or exceed this proposed loan amount. He or she will also look for other things about the home that could create problems such as structural issues, a leaky roof, missing paint, and plumbing problems.
Upfront Guarantee Fee equals 1% of the loan amount for purchase and streamline refinance. Up Front Fee can be rolled into the loan amount.
Annual Fee equals 0.35% of the remaining mortgage balance, which is divided by 12 and added to monthly payments.
Requirements, information, and programs are subject to change without notice. Please contact us for more information