It should be in a ‘rural’ area, which is defined as one that has less than 20,000 people. The person buying the house must meet the set income caps. The comparison is made based on the local median salary, and you should be making below 15% of this amount. The other USDA eligibility requirement states that the house should be your primary residence as people are not allowed to take these loans for vacation and investment houses. The loans are used to buy single-family homes, and no duplexes can be financed.
Individuals should also meet USDA eligibility requirements that specify the repayment terms and standards. First, you should have a stable job and income, something that can be backed by your tax returns. Your FICO credit score should be at least 640. Lastly, you should have a debt to income ratio of 41% or less.
USDA Eligibility; Do I Qualify for this Loan?
When shopping around for a home loan, you have a couple of options to look at. The regular mortgages are not very favorable, a reason why people tend to look at some of the loans offered and backed by the government. One popular type of such loans is the USDA loan. These are mortgages guaranteed by the US Department of Agriculture as part of the USDA Rural Development Guaranteed Housing Loan program. The money is available to home buyers with low and average income, and it offers full financing with reduced mortgage rates and insurance premiums. In a nutshell, these loans are meant to give people who might not afford to pay for a house a cushioned way of doing it.
With the seemingly good terms, it is a no-brainer that people will be scrambling for these loans. This is why you need to learn more about USDA eligibility and see if you qualify for one or not. Read on;
What are USDA Loans?
These loans are guaranteed by the US Department of Agriculture. This is the insurance that protects lenders in the niche, something that allows them to offer reduced interest rates and no down payment loans. This encourages people to own homes and foster development in these areas.