Applying for a USDA Loan

03/28/2021

USDA home loans are a great option for both first-time, and experienced home-buyers. They do not require a down payment, making them an attractive option to some home-buyers. The property must be located in a “rural” area, and there are income limits based on your household size as well. Below, we will outline the steps you should take to get started on applying for a USDA home loan.

Applying for a USDA Loan in Missouri and nearby areas

Contact a USDA Mortgage Lender

The very first step in applying for a USDA loan should be to contact a mortgage lender. They will be able to let you know how much you are approved for, and that will dictate the homes you will look at.

USDA is a government loan program, and not all lenders are able to offer or help you with applying for a USDA home loan. You will want to find a lender who is approved to assist you in applying for a USDA home loans if it is going to be the best program for you to use.


USDA Loan Prequalification


Once you’ve found a lender to work with, they will want to gather some initial documents from you to get you pre-qualified. They will request permission to pull your credit, and get some basic income and asset documentation from you as well. USDA has income limits, so they will be making sure that you are inside the income limits, as well as the debt-to-income limits for the loan amount and purchase price you are requesting. Once they have determined that you do qualify for a USDA home loan, you will receive a pre-qualification letter that you can use to shop for the perfect home.


Find a USDA Eligible Property


Now that you have applied for you USDA Home loan and have pre-qualification letter, you will want to find a real estate agent if you haven’t already. USDA rural housing loans do require the home to be in an eligible “rural” area. Your agent will help you to find homes in a USDA eligible area to show you, and they will make sure that they are in your price range. Your lender and real estate agent can work together to determine the best home for you that you can afford. Having your USDA Home Loan pre-qualification letter will set you apart from other home-buyers, and let sellers know that you are serious when making an offer.

Go Under Contract

After applying for your USDA Home loan and obtaining your pre-qualification allows you to start the search for your new home. When you find the home that you want, the next step will be to make an offer on it through your real estate agent. Your agent will work with the sellers, and seller’s agent if they have one, and draw up a contract for all parties to sign with the agreed upon price. At this point, your lender has determined that you can afford the home you are wanting to buy, and your lender or agent will have confirmed that it is in a USDA eligible area. Once you are officially under contract, your lender will take it from there, and guide you through the rest of the loan process.

Applying for a USDA Home Loan is a great option to investigate and talk to your mortgage lender about. USDA Home Loans are only offered in eligible areas and have income limits based on the household size. To see if you might qualify for a USDA home loan, talk to a mortgage loan officer today that will assist you in starting the process in applying for your USDA Home Loan. They will be able to answer any questions you might have, and determine if the loan program is a good fit for you.


FAQs for Applying for a USDA Loan


What is the first step in applying for a USDA loan?

The first step in applying for a USDA loan is to contact a USDA-approved mortgage lender. Not all lenders can offer USDA loans, so it’s important to find one that is authorized to assist with this type of loan. The lender will help you determine how much you are approved for, which will guide your home search.

What is involved in the USDA loan prequalification process?

During the prequalification process, your lender will gather initial documents, such as your credit report, income, and asset information. They will ensure you meet the income and debt-to-income limits for the USDA loan. If you qualify, you will receive a prequalification letter that you can use to shop for homes within your budget and USDA eligibility criteria.

How do I find a USDA-eligible property?

After receiving your prequalification letter, work with a real estate agent to find homes in USDA-eligible “rural” areas. Your agent will help you identify properties within your price range that meet the USDA’s location requirements. Your lender and agent will collaborate to find the best home for you that you can afford.

USA Mortgage Abadi Region

USA Mortgage Abadi Region

A full-service mortgage lender with local branches in Missouri, Arkansas, Illinois, and nearby areas.