USDA Mortgage Loans

USDA loans are officially designated 502 Guaranteed Rural Housing Loan Program, administered by the US Department of Agriculture and designed to serve the needs of rural residents with modest income and low collateral. USDA loans enable residents in areas designated as rural to purchase new or existing dwellings (some lenders do not offer loans on manufactured or mobile homes) by guaranteeing the loan made by an approved mortgage lender, thereby lowering the risk for these loans.

How to qualify for a USDA loan

• The home you wish to buy must be in one of the geographically qualifying areas which are designated as Rural for USDA Loans. Click the link to quickly find out if the property you like is located in an eligible area.
• Property Type. The home you are buying must be a single family residence. It must also be your primary residence
• Credit. All USDA Loans require a credit score of a least 600 or higher to qualify and a good credit history.
• Debt Ratio. Typically for a full approval your total debt to income should not be higher than 41 percent of your gross monthly income.
• Income Limit. USDA Loans have a maximum income limits for the median income in your area. If you make more money than the limit, you will not qualify. There are different brackets for determining the maximum income allowed. Those are determined by your geographic area and the number of people living in the household. You may not earn more than 115 percent of adjusted area median income.

Your USDA loan application

Your loan application will be handled by my team, as mortgage consultants for an approved lender, and is subject to our loan approval process. Take note that HUD reports that approximately 30 percent of guaranteed 502 loans are made to families with incomes below 80 percent of Area Median Income

photo courtesy of Michael Lawrence