USDA Loan Rates
Below are today’s USDA Loan Rates for mortgages in Kansas and Missouri. The USDA Mortgage Rates below are subject to change without notice.
What is a USDA Loan?
A USDA loan, also known as the USDA Rural Development Loan Program (United States Department of Agriculture), is a mortgage loan offered to low-and-moderate-income households in eligible rural areas.
What are the Household Income Limits?
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. The income listed in “Section 502 Guaranteed Rural Housing Loan Program” is used for lender 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 (real estate) as your primary residence
- Be a U.S. Citizen, non-citizen national or Qualified Alien
- Meet the financial and credit requirements
- Applicants 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 Premium (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.
For Example: With a $100,000 loan amount the one-time loan Guarantee Fee is $1,000 or (1.00%), which can be financed or paid at the time of closing (closing costs). 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. A debt to income ratio is the total monthly mortgage payment plus debts (car payments, credit cards, students loans, etc.) divided by your gross income.
Typically, USDA limits the debt-to-income to 41%. However, a borrower can exceed 41% under certain circumstances. Such as the borrower’s 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.
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
- A legible copy of your Driver’s License(s)
- Two years Tax Returns (IRS Forms 1040, W2’s and 1099 – if applicable) – Not applicable if a Salaried or Hourly Employee