USDA Loan Changes and Options

07/19/2020

Many people are unaware of the U.S. Department of Agriculture mortgage program. USDA home loans don’t require down payments and are available for eligible rural and suburban homebuyers. Read on to see if this program would be a good fit for you and your household.

USDA Loan changes and options in Missouri and nearby areas

What are the USDA income limits?

USDA loans are made to help people achieve homeownership who may not be able to purchase a home otherwise. To make sure the loans go to people who really need them, the USDA sets income limits, which is a key part of qualifying for a USDA loan.

Income is based on the entire household, unless the household member is a minor, a full-time student earning more than $480 a year, or a live-in aid. Tax credits and lump sums, such as inheritances, are also excluded from the income calculation. USDA’s gross income calculation does include all salaries, overtime, commission, tips, and bonuses. The USDA looks at the amount earned before payroll deductions are applied.

In 2024 for Missouri, the USDA loan income limits have been updated to reflect current economic conditions. For households with 1-4 members, the average income limit is set at approximately $110,650 per year. For larger households with 5 or more members, the limit is higher, at around $155,650 annually. These limits can vary depending on the specific area within the state. To get the most precise information for your location, you should use the USDA’s interactive map, which provides detailed income limits based on state and county.


Who can qualify for USDA loans?


The income limit isn’t the only requirement for USDA qualification. You must also be a U.S. citizen, be able to afford a monthly payment that’s no more than 29 percent of your monthly income, prove consistent income for the last 24 months, and have a good credit history. You also have to reside in a rural area, although some suburbs are included in the program. It’s also important to note that you do not have to be a first-time homebuyer to qualify for a USDA loan.

How Can I Get 100% Financing?

To access 100% financing for a home purchase in Missouri, you have several options if you meet the qualifying criteria:

USDA Loans: If you’re eligible for a USDA loan, this could be your pathway to 100% financing. USDA loans are designed to help rural homebuyers who meet certain income requirements. To see if you qualify, you would need to check the USDA eligibility criteria.

MHDC Loans: The Missouri Housing Development Commission (MHDC) offers programs like the First Place Loan Program and the Next Step Program, providing cash assistance loans for those who may not have the funds for a down payment. These programs have specific qualifications and benefits, so visiting the MHDC website would provide you with more detailed information.

City of Columbia Grant: For residents looking to purchase within the Columbia city limits, this program targets low-to-moderate income families, including first-time homebuyers and single parents. The grant offers up to $7,500 or 7.5% of the purchase price (whichever is less) as a loan. The program has certain income guidelines which you must meet to qualify.

Each of these options has its own set of requirements and benefits. It’s important to research and consider which one aligns best with your financial situation and housing needs.

The American dream of homeownership may feel out of reach, but that’s why these programs exist. Everyone deserves to live in a home they love, and these local and national programs can make that dream a reality. If you’re not sure which financing option is right for you, let us know. We’d love to help you through the process.


FAQs for USDA Loan Changes and Options


Can I use a USDA loan to buy a home in a suburban area?

Yes, USDA loans can be used to purchase homes in eligible suburban areas, not just rural areas. The USDA defines eligible areas based on population density and other factors. You can use the USDA’s property eligibility tool on their website to check if a specific address qualifies.

Who can qualify for USDA loans?

To qualify for a USDA loan, you must be a U.S. citizen with a good credit history and consistent income for the past 24 months. Additionally, you need to be able to afford a monthly payment that is no more than 29% of your monthly income. The home you purchase must be located in a rural or eligible suburban area as defined by the USDA.

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