There are many myths that surround the USDA Guaranteed Loan, one of which is that you must be a low-income borrower. In reality, you can make as much as 115% of the average income for your area and still qualify. In many areas, this means $78,200. However, it can mean as much as $202,250 in some areas. Compare Offers from Several Mortgage Lenders. The USDA breaks income categories down into three categories: Very low income Low income Moderate income The borrowers in the … [Read more...]
Is there a Maximum Loan Amount for USDA Home Loans?
USDA loans provide 100% financing for low to moderate income families. It’s a program that is meant to be a ‘last resort.’ In other words, if you qualify for any other program, you cannot use USDA financing. If you do qualify, though, you probably want to know if there is a maximum loan amount. Compare Offers from Several Mortgage Lenders. Technically, the USDA does not maximize how much you can borrow. However, they do so in a roundabout way. They restrict who is eligible for the program … [Read more...]
What are the USDA Mortgage Income Limits?
USDA loans provide mortgage financing for borrowers in a designated rural area and that mean certain income limits. Rather than making sure you make ‘a lot’ of money, the USDA caters to borrowers that don’t exceed the limits they set. Compare Offers from Several Mortgage Lenders. The USDA program is only for those households considered ‘modest.’ In other words, they would not be able to afford a home with any other mortgage program. If a household’s income exceeds the designated limits, … [Read more...]
The Lowest Credit Score Allowed for USDA Financing
Do you prefer rural living to the hustle and bustle of city life? You may want to consider USDA financing then. You can borrow 100% of a home’s purchase price with this program! Of course, it has specific guidelines, but luckily, you don’t need a high credit score to qualify. Compare Offers from Several Mortgage Lenders. Want to learn more about this innovative program? Read on. The Minimum Credit Score The USDA requires a minimum credit score of 640. In the eyes of FICO, this is a … [Read more...]
Why do Lenders Need IRS Form 4506-T?
When you complete your mortgage paperwork, you likely feel like you give the lender everything you have. Just when you think you are done, though, they will likely ask for IRS Form 4506-T. This form gives the lender access to your tax transcripts. If you already provided your income information, though, why does the lender need your transcripts? We explore the reasons below. Compare Offers from Several Mortgage Lenders. Verifying Your Income The main reason lenders require the IRS Form … [Read more...]
Understanding the USDA Rules Regarding Gift Funds
USDA loans do not require a down payment. They allow 100% financing for an eligible property. However, there are closing costs a borrower must pay. If the borrower does not have them, they may use gift funds as long as they follow the USDA rules. Gift Funds and Compensating Factors The USDA does not allow gift funds to count as a compensating factor. A compensating factor is something that makes your application less risky. Let’s say, for example, you have a high debt ratio. The USDA allows … [Read more...]
Can you use a Cosigner for a USDA Loan?
Sometimes you can’t get approved for a mortgage. It may mean that you’ll need a cosigner. When someone cosigns on a loan for you, they take on the responsibility of the mortgage if you stop paying. That’s a big responsibility. Each loan has its own requirements regarding cosigners, including the USDA loan. The Basic Cosigner Requirements The USDA loan offers flexible guidelines. You don’t need a down payment and you can have a low credit score. In fact, you have to have low income in order to … [Read more...]
Are Delinquent Payments Allowed on the USDA Streamline Refinance?
The USDA rolled out a pilot program in 2012 to help underwater homeowners refinance their home. Homeowners in a few lucky states were able to take advantage of this program. It didn’t matter if they were upside down on their loans. They only had to meet a few simple requirements and they could refinance, saving money each month. Today, the program has been rolled out to many more states. This gives many more homeowners the opportunity to refinance into a lower interest rate. The best part … [Read more...]
How to Get a USDA Loan After Bankruptcy
It happens to the best of us. You had to file for bankruptcy. Does this mean you are stuck renting for the rest of your life? Luckily, you’re not. There are plenty of opportunities to obtain a mortgage, including the USDA loan. If living in a rural area appeals to you, read on to see just how long you’ll have to wait to secure a USDA loan. The Type of Bankruptcy Matters First, you must determine what type of bankruptcy you filed. There is Chapter 7 and Chapter 13. Chapter 7 bankruptcy … [Read more...]
How Many USDA Rural Housing Programs Are There?
The USDA develops and strengthens communities in rural America with housing grants and loans made directly to individuals and families, or through public bodies and organizations. These rural housing programs are used in buying, constructing, repairing, or refinancing homes in rural areas. Which among the rural housing programs is for you? Take your pick. This way to USDA-approved lenders.» Rural Housing Programs Here’s a summary of the salient points of the USDA rural housing programs, as … [Read more...]