USDA home loans have been popular in the last few years due to the crash of subprime market and the credit restrictions. USDA loans are one of the only loans beside VA loans that offer 100% financing and with their low monthly MI, it makes them a great option, but you need to watch out for some of the guidelines that aren’t covered on the cover and can come up as your loan progress with the lender.
The basic rules and guidelines about the income limits, location of property, condition of property are all the first steps we use to qualify the borrower and here are some of the more detailed rules that you need to watch for before making the offer on your dream home.
1. USDA Home loans are mostly made for borrowers who can’t afford to put any money down or don’t have any options with other loan programs. Now if you have great credit and 20% of your down-payment sitting in your bank, USDA probably will ask you to find alternative option.
2. If you are buying a house that has over 5 acres of land, USDA office will look at these case by case, which it does defeat the purpose of the whole loan in rural areas!
3. Although USDA isn’t a first time home buyer program, you only can own one home at any given time with this loan. So, if you do have three investment property and want to buy your own home with the USDA, you may run into some problems.
4. If you do meet the income eligibilities for USDA but have someone else living in your house with you who also makes money and has income, then you need to add that to the household income and calculate it based on their income, even if they aren’t going to be on the loan or title.
If you need to learn more about the USDA loans, call or email me anytime.