A USDA (United States Department of Agriculture) home loan, also known as the USDA Rural Development Guaranteed Housing Loan Program, is a mortgage loan offered to low-and moderate-income households in eligible rural areas.
What are the Income Requirements?
USDA offers an Income Eligibility tool online. Presently, this tool requires the county where you wish to purchase or refinance, the number of people in your household and the monthly income you receive. Finally, the income listed in “Section 502 Guaranteed Rural Housing Loan Program” is used for qualification purposes.
What are the USDA Eligible areas?
USDA offers a Property Eligibility mapping tool online. You can use a “property address” or “city, state” to see the areas eligible for financing.
What is the minimum Credit Score for USDA?
USDA requires a middle score of at least 640, assuming an automated loan approval.
Other USDA Loan eligibility requirements:
- Occupy the dwelling as your primary residence
- Be a U.S. Citizen, non-citizen national or Qualified Alien
- Meet the financial and credit requirements
- Must not have been suspended or debarred from participating in federal programs
What is the minimum Down Payment on USDA?
A USDA Guaranteed Home loan does not have a down payment requirement. However, you can choose to make a down payment and it may come from a gift or any documented asset.
Is there Mortgage Insurance (aka PMI) or a Guarantee Fee?
USDA charges mortgage insurance annually at .35%. As a result, your monthly payment will include mortgage insurance.
USDA charges a 1.00% Guarantee Fee at the time of closing. Additionally, this amount is financed into your final loan amount.
For Example: With a $100,000 loan amount the one-time Guarantee Fee is $1,000 or (1.00%). This amount is financed into the final loan amount. The monthly payment for mortgage insurance would be $29.17.
What is the maximum Loan Amount?
In fact, there is no maximum loan size for the USDA loan program. However, the debt-to-income ratio does limit the amount borrowed.
USDA typically limits the debt-to-income ratios to 41%. However, a borrower can exceed 41% in certain circumstances. Such as, the borrowers middle credit score is over 660, and there is stable employment, or can show a demonstrated ability to save.
What type of loans terms are available?
Presently, 30-year and 15-year fixed rate loan terms are available for USDA home loans.
What is the current Mortgage Rates for a USDA loan?
USDA Mortgage Rates
|30 Yr Fixed|
How do I apply for a USDA home loan?
Metropolitan Mortgage will need to review your income, assets, and credit to prepare your pre-approval letter. This documentation will help us determine the size of a loan you can afford. Click here to Apply Online and upload the documents below:
- Most recent Paystubs
- Most recent two months Bank Statements – all pages
- Legible copy of your Driver’s License(s)
- Two years Tax Returns (IRS Forms 1040. W-2’s and 1099 – if applicable) – Not applicable if a Salaried or Hourly Employee
Have Questions? Contact Us online or call 913.642.8300.