Posted on: 22nd May, 2009 08:07am
A USDA home loan (also known as a Rural Development Loan) is a government-guaranteed mortgage loan. The purpose of this loan is to help the rural communities of the country with affordable home loan opportunities. One important feature of this loan is that no down payment is required for this and 100% financing is offered by the lender to the qualified borrowers. Usually the rates of these offers are lower than other traditional home loan offers and the rates are of fixed type.
You need to fulfill certain criteria in order to become eligible for a USDA loan. Qualification for this mainly depends upon 3 parameters:
In order to become eligible for this offer, you need to provide necessary documents in support of your income. In fact, you need to provide documents which support continuous employment of 2 years. If you are a self-employed person, you need to furnish proofs of consistent income. However, for students, this 2 year income requirement is relaxed.
USDA lender does not allow you to own another home. This loan program is targeted to those home buyers who don’t have adequate housing and who do not meet eligibility criteria to obtain other loans.
Eligibility criteria of USDA mortgage
You need to fulfill certain criteria in order to become eligible for a USDA loan. Qualification for this mainly depends upon 3 parameters:
Credit records
Usually lenders require a credit score of 620 or more in order to make you the offer. Underwriters check your payment history. Even your past blemishes of defaults or untimely payments are overlooked in case you can reestablish your credit in the past 1 year. Again, you must be out of foreclosure, Chapter 7 bankruptcy, deed-in-lieu of foreclosure or short sale for at least 3 years.Income
In order to become eligible for this offer, you need to provide necessary documents in support of your income. In fact, you need to provide documents which support continuous employment of 2 years. If you are a self-employed person, you need to furnish proofs of consistent income. However, for students, this 2 year income requirement is relaxed.
Location
Your house must be located in a designated USDA rural area so as to qualify for a USDA loan. In order to qualify for this offer, your yearly income should not be more than yearly USDA income limit set for your county.USDA lender does not allow you to own another home. This loan program is targeted to those home buyers who don’t have adequate housing and who do not meet eligibility criteria to obtain other loans.
I am seeking to buy a home. I have one home in my name, which disqualifys me for the first time home buying program, but is there still certain USDA Loan programs for regular buyers? The middle TN area is deemed under the USDA regulations and my income is under the limit.
Hi bcook,
Even though you may not qualify for the first time home buying program, there are other USDA home loan programs that you may qualify for.
The USDA offers Rural Housing Direct Loans, also referred to as section 502 Direct Loans, for the borrowers with low and very low income. But your income has to be below the median income of your area and you have to be able to afford the mortgage payments including mortgage insurance and taxes.
There is another loan program known as Housing Guaranteed Loan for low and medium income families. Here, the applicant may have income of upto 115% of the median income for the area. This type of loan does not require any downpayment.
You can find more about USDA mortgage programs and the contact details at the following site:
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?NavKey=home@1
Even though you may not qualify for the first time home buying program, there are other USDA home loan programs that you may qualify for.
The USDA offers Rural Housing Direct Loans, also referred to as section 502 Direct Loans, for the borrowers with low and very low income. But your income has to be below the median income of your area and you have to be able to afford the mortgage payments including mortgage insurance and taxes.
There is another loan program known as Housing Guaranteed Loan for low and medium income families. Here, the applicant may have income of upto 115% of the median income for the area. This type of loan does not require any downpayment.
You can find more about USDA mortgage programs and the contact details at the following site:
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?NavKey=home@1
i have a home i own but it is on a baloon note with the house i live in now is there any way i can get help to lower my payments or what can i do
hi,
you have two options. you can either refinance the balloon mortgage with a fixed rate mortgage or you can request your current lender to lower your payments through a loan modification. if you can refinance at a lower rate, it will help you reduce your monthly payments. on the other hand, modification will also reduce your monthly payments, but it will be for a limited period of time. once the initial period is over, you will have to come up with the entire balance of the loan for the balloon payment.
you have two options. you can either refinance the balloon mortgage with a fixed rate mortgage or you can request your current lender to lower your payments through a loan modification. if you can refinance at a lower rate, it will help you reduce your monthly payments. on the other hand, modification will also reduce your monthly payments, but it will be for a limited period of time. once the initial period is over, you will have to come up with the entire balance of the loan for the balloon payment.
Would an 03 model mobile home on three acres qualify for a rural development loan
Welcome andre,
You need to contact the lenders offering rural development loans and they will be able to let you know whether or not you'll qualify for the mortgage.
You need to contact the lenders offering rural development loans and they will be able to let you know whether or not you'll qualify for the mortgage.
I'M 68 YRS OLD AND WOULD LIKE TO HAVE MY OWN HOME, IF POSSIBLE. I'M RETIRED WIDOW AND LIVE ON SSD AND SMALL ARMY PENSION.
Hi DONNA,
You can go for the option of reverse mortgage in order to buy a property at this age. You can contact the local reverse mortgage lenders in order to get such a loan.
Thanks
You can go for the option of reverse mortgage in order to buy a property at this age. You can contact the local reverse mortgage lenders in order to get such a loan.
Thanks
i found a foreclosed home for $22000.00 it will be a first time buying a home for me. how do i start?
Hi donna,
You should contact the local lender and apply for pre-approval. Once you get the pre-approval letter, it will be easier for you to get final approval for the loan.
Thanks
You should contact the local lender and apply for pre-approval. Once you get the pre-approval letter, it will be easier for you to get final approval for the loan.
Thanks
I was reading to be eligible you need to show proof of 2 yrs continuous employment and I'm wondering if in the past 2 years we had 1.5 months unemployed will that disqualify us?
Hi anonymous,
Yes, you will have to show 2 years of continuous employment in order to get a mortgage. Unless you are able to show the regular employment, you may not get a loan.
Yes, you will have to show 2 years of continuous employment in order to get a mortgage. Unless you are able to show the regular employment, you may not get a loan.