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USDA financing

One of the most useful loans available are loans offered by USDA. That is the United States Department of Agriculture. USDA offers several types of loans but the loan product that I have experience with is the Single Family Housing Guaranteed loan Program.

So, what makes this program so special? Mainly, it is the fact that it covers 100% of the purchase price. The only other program that offers this type of financing is a VA loan. The ability to lend to 100% financing and avoid a down payment is a HUGE benefit to many prospective homeowners; however, this is not without additional layer of guidelines.

USDA Single Family Guaranteed loan programs have two major guidelines that must be met to be eligible. The first guideline is that it must be located in a specific area that USDA has outlined on their website. One of the objectives of this loan program is to help develop rural areas. This is why one would not be able to utilize this program within a populated metro area. These loans are designed for homes in areas that are not highly populated. Perfect for some borrowers.

The other guideline that is taken into account is the use of income limits. USDA has a set specific income limits that each borrower has to adhere to. What this means is that if you make too much, it will disqualify you from the program. USDA single family guarantee program is designed to help moderate income families.

Income limits are county and household specific. Each county has its own income limit. The household number affects this limit. For instance, a household of 5 would have a higher income limit than a household of 2. Another item to note about the household income limitations is that all income from the household is counted. What this means is that, let’s say, you have a husband and wife purchasing a home but only the husband is on the loan. We would still have to verify the income of the spouse and utilize that in the calculation of income limitations.

If you think this program is a good fit for you.  Call me, and I can walk you through the pre approval process. Thanks! Zach

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