USDA Home Loans - Are You Eligible For A USDA Home Mortgage?

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USDA Home Loans was created to assist in the development of the lesser populated areas (rural) of the country. The United States Department of Agriculture Rural Housing Program has gained in popularity recently because it is almost the last of the 100% financing options available in the market today.

USDA Home Loans have a lot of benefits beside the 100% (103% including the 3% funding fee) financing aspect. You can learn more about some of the benefits by clicking Rural Home Loans.

Benefits Of USDA Home Loans

USDA Home Loans are similar to FHA Home Loans in that they offer flexible credit qualifications, the debt to income ratio allowances are reasonable, great 30 year fixed interest rates and not many roadblocks to get a loan.

You can also finance up to 100% of any repairs that are needed based on the "as-improved" value. The "as-improved" value is what the house will appraise for after the improvements are done. This opens up the possibility of buying a HUD home or other bank foreclosures that would need repairs.

There are some requirements to be eligible for USDA home loans. You must meet some income and credit qualifications set by the USDA. The good thing is your credit history does not have to be perfect but you do have to show the ability to make the monthly payments. Also, the property you want to buy has to be located in a USDA eligible rural area.

Are You Eligible For A USDA Home Mortgage?

Not everyone will be able to obtain a USDA home loan because as with most loan products there are certain requirements and guidelines for a USDA home loan.

Here are few of the requirements:

1. You must be a United States citizen, a qualified alien, or admitted legally to the United States for permanent residence.

2. You annual income must be less than the income limit established by the USDA. Income limits are set by the USDA for each county in the United States and you adjusted income can not exceed the limit where the property is located. All adults that reside in your household that has an income must be included in the total income of the household. Click USDA Housing Income Eligibility to see if you are eligible.

There are a few adjustments can be made to gross income in order to meet the income qualification. An example of one of these adjustments is expenses for child care.

3. You do not have to have perfect credit but you do need average credit.

4. The mortgage payment including property taxes and insurance can not exceed 29% of your gross monthly income.

5. All of your debts must be less than 41% of your gross monthly income.

6. You adjusted household income can not be more than the maximum income limit in the county the property in located as determined by USDA.

7. You do not currently own an adequate home.

8. You must have the legal capacity to incur the loan obligation.

9. You have to be the owner occupant. You can not buy the property to rent it.

Is The Area You Are Looking To Buy A Home Located In An Eligible Area?

Again this type of loan is for "rural areas" in the country but some of these rural areas are not so rural. You can check if the property that you may want to buy is in an eligible area or not by clicking on the link below and entering the address of the property.

Click USDA Home Loans Property Eligible Area to find your area.

Just click the the "Accept" button for the Property Eligible Disclaimer.

USDA home loans are a great way to finance your future dream home with no money down payment!

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