USDA House Search, Requirements

USDA house FloridaThe USDA Rural Development 502 guaranteed loan program offers 100% mortgage financing throughout qualified locations in Florida. With relaxed qualifying terms, minimal mortgage insurance and no loan limits, this program is perfect for FL first time home buyers. While it might seem to be too good to be true on the surface, USDA mortgage loans come with a few eligibility requirements. However, if you and the house meet the USDA’s income and location criteria, the program could be a good option for you.

The key eligibility limitation for the USDA program is that the house has to be in what the USDA considers a “rural” area.  Now, it’s important to understand the USDA’s definition of rural is relatively broad.  In fact as of 2014-2015 many suburb locations around Jacksonville, Tampa, Orlando, Sarasota, Gainesville FL and Tallahassee ARE approved. Overall, if you aren’t in the middle of a congested metropolitan area, there’s a good chance that your property will be eligible.  Call us at ph: 904-302-6060 to talk about your area.

The USDA doesn’t impose any official price or loan amount limits on the home that you buy. On the other hand, the USDA’s income rules do impose a debt to income ratio limit for home buyers. Given that the USDA usually applies a 29 percent front-end debt-to-income ratio to determine how large your mortgage payment can be, a family making $5,500 per month ($66,000 per year) would be limited to a monthly payment of around $1,595, which is $5,500 per month multiplied by the 29% housing ratio cap. As your income goes up or down, your maximum payment can also fluctuate up or down. Then again, the program also has the flexibility to allow higher monthly payments for otherwise well qualified Florida buyers.

USDA Rural Housing limits the type of property can purchase. You aren’t allowed to use a USDA loan to purchase a property with additional units or with any additional structures that you might use for income. For instance, a barn or a legal (and rentable) in-law unit could would likely be ineligible, while a small storage shed probably would not. In addition, if you have an in ground swimming pool, the appraiser will have to subtract its estimated value from your home’s price. Although pools are allowed with the USDA program, this rule regarding the appraised value can often time cause an appraisal issue.  Read more about USDA loans and swimming pools here

The USDA limits the properties that you can buy based on their condition and quality. The property has to have adequate mechanical systems and be termite-free. It also has to meet the USDA’s standards for being decent, safe and sanitary. The home must meet all the same HUD standard that apply to other government home loans like FHA, and VA.  To qualify for a USDA loan, a home must have a hard or all weather road leading to it as well.

The home the USDA will approve for you varies based on your income and its location. The USDA imposes income limitations that vary by area and your household income can be no more than 115% of the area’s median income. In areas with a $50,000 median income, a household income over $57,500 will disqualify you, since $57,501 is more than 115% of $50,000. On the other hand, in an area with a median income of $95,000, you can qualify to take out a USDA loan as long as your household income is $109,250 or less ($95,000 multiplied by 115 percent equals $109,250).  The income limits in most Florida counties for a household of 1-4 members is $74,750.  Please see all the latest USDA income limits here.  As for the property, USDA will permit any single family home that is located in a USDA approved area, please find the USDA eligibility map here.  You can look up your city or an actual address to see if it’s approved.  Keep in mind, USDA is not concerned with the home seller or whether the home is being sold as a regular sale, foreclosure, etc.  The actual location of the home is what’s important.

Florida home buyers that have questions about the USDA home application process can contact us at ph: 904-302-6060 7 days a week. You can also fast track your request by submitting the information request form on the right side of your screen.  Please be sure to also read all the USDA FAQ’s by clicking here.

Serving all of Florida – Jacksonville, Tampa, Orlando, Sarasota, Gainesville FL, Tallahassee, USDA House Search, Requirements

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Hardee,De Soto County– USDA 100% Financing Loan

Hardee County De Soto USDA LoanGreat news for all of Hardee and De Soto County home buyers, both counties are currently 100% eligible for the USDA 502 Guarantee Loan. This is especially great for first time buyers around Arcadia, Bowling Green, and Zolfo Springs that have limited cash savings needed for conventional home loans.  Most conventional home loans today require a minimum of 10% down payment. Even the FHA loans require a 3.5% down payment.

Not only does the USDA allow buyers to purchase a home with $0 down payment, buyers can also roll their closing costs into their loan, or have the home sellers pay. With a properly negotiated purchase contract, a homebuyer can purchase with very little money out of pocket. The only other home loan that permits 100% financing in Florida is a VA mortgage, however this is only reserved for military and veterans.

Some of the great features of the USDA program in  Hardee – De Soto County include:

  • 100% financing.
  • Reduced monthly mortgage insurance (when compared to other loans)
  • You don’t need to be a first time home buyer.
  • No buyer class or school required , close in as little as 40 days.
  • Any habitable single family home in Hardee or De Soto County is approved for the Rural Housing USDA loan. Mobile homes are not allowed.

Call us at 904-302-6060 with questions, please also visit www.UsdaMortgageSource.com. If you need assistance with starting a new USDA loan application or pre approval, please just submit the quick info request on the right side of your screen.

We serve Hardee & De Soto County 7 days a week including Bowling Green, Ona, Wauchula and Zolfo Springs. Arcadia, Brownville, Cubitis, Fort Ogden, Hull, Lake Suzy, Lansing, Nocatee, Southfort, Hardee,De Soto County– USDA 100% Financing Loan

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USDA Mortgage Loans – Home Seller Information

USDA FactsWe write tons of information related to home buyers and USDA loan process. However, very rarely do we discuss important things Florida home sellers need to know.  After all, many home sellers like to know what to expect in terms of their buyers financing and ability to actually close.   First a little background,  the  USDA home loan, also known as the USDA Rural Development, 502 Guaranteed Housing Loan Program, or “Rd” Loan is a mortgage loan offered to rural property homebuyers by the United States Department of Agriculture.  The USDA loan program is a government mortgage program that is backed by the USDA and provides a number of homeownership opportunities across Florida for little to no money down.  Very similar to the other government home financing options like FHA and VA loans.  Here is some information and things that home sellers should know –

  • The USDA program does not have any set loan amount limits. The homebuyers qualify based on what their debt to income ratios permit. The limit for USDA loans is 29% for housing expense.
  • Any single family home that is located in a USDA approved location is ok for financing. Single Family, Townhomes and select condos are all ok. No mobile or manufactured homes. Like all government home loans, the house does need to meet all HUD standards. It’s need to be immediately livable and good condition, cannot be a rehab type project. Again, pretty much the same as FHA and VA home loans.  Single Family, Townhomes and select condos are all ok.
  • Sellers are allowed to pay up to 6% of the buyers closing costs and pre paids.
  • Sellers are not required to pay certain “non allowable” closing costs – like in the case of a VA loan. Saves home sellers money.
  • The USDA housing program does not require any special home inspections.
  • USDA appraisal process is essentially the same as a conventional loan. However, the value of any in ground swimming pool cannot be included ( This rule is expected to change in 2015)
  • USDA closing times do take about 10 days longer when compared to FHA and Conventional loans. In Florida, the time it takes from contract to closing is typically 40-45 days….. not 60 or 90 days as many assume.
  • The USDA mortgage allows more home buyers to enter the Florida housing market since the program permits 100% financing.

Sellers should have no concerns about a accepting a USDA buyers offer.  Like many things in regards to mortgages, a lot comes down to the lender and their ability to communicate and close loans efficiently.  Questions?  Please call us at 904-302-6060 7 days a week, You can also fast track your request by submitting the information request form on the right side of this page.

Please sure to visit www.usdamortgagesource.com

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Steps To Apply For USDA Loan

USDa loan applicationApplying for USDA mortgage is rather easy, the entire application process only takes about 15-20 minutes to complete.  The USDA mortgage process is very similar to other loan programs. The key difference is that your USDA Home Loan is submitted to Florida USDA Field for final approval once the lender is underwriting process is complete.  It’s a two step process. Below we will detail the steps to apply for USDA loan and some steps and things homebuyers want to do to prepare for the USDA pre-approval  – loan application process.

  • First, be sure to tell us your goals, our first priority is to help you fulfill your dreams of homeownership. But to help us do so, we need to know a little about your goals. What type of loan you are applying for? 100% USDA Loan, FHA Mortgage, VA Mortgage, etc.  If you aren’t sure, that’s ok. Your mortgage loan advisor will discuss the difference between the programs, pro’s and con’s and things you need to know.   If you are applying for the USDA Rural Home loan, be sure you first meet the eligibility factors in regards to property location and household income limits.
  •  Second, be sure to know all the basic questions that will be asked by the mortgage lender – Last (2) years of address history.   Last (2) years of employment history – know the address, phone number, length of employment, salary.  Date of Birth, Social, contact information.  Also know your asset / bank information. The name of each bank and your balance in each account.  Will you be the only borrower listed on the mortgage application?  If not, be sure you have all the above for the co applicant as well.
  • Third, what is your timeline? Is homeownership something you want to accomplish in the next few months? Few years?  Let the loan officer know your timeline and they will help you better prepare.

To get started on your Florida USDA loan application, call us Monday – Sunday at ph: (904) 302-6060. You can also advance your request and have a specialist contact you today by submitting the information request on the right side of your screen.  Serving all Florida home buyers including those in St. John, Duval, Nassau, Clay and Baker County –  Jacksonville, Palm Coast, St. Augustine, Callahan, Yulee, Hilliard, Orange Park, Green Cove Springs.

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Typical USDA Loan Closing Costs

USDA Florida Closing CostsMany buyers ask what they should expect in regards to USDA Rural Housing closing costs, who pays what portion? etc.  It’s important to remember each state can be different in regards to government related fees.  Buyers need to understand that many different parties are involved in a real estate transaction. As a result,  many of the closing costs are not related directly to the lender. In Florida, lenders will customary charge a underwriting and processing fee, that should be about it. All the other costs are related escrow reserves and  third parties like –

Appraiser.

Surveyor.

Home Inspector.

Government recording, intangible taxes, Document stamps.

USDA 2% funding fee.

Title and closing fees –  Title Insurance, Title endorsements.

Escrow reserves for taxes and 1 year home insurance.

General rule of thumb is all the closing cost AND prepaid escrows will be about 2.5% – 6% of the purchase price. The higher the sales price, the less percentage of closing costs would be needed. The reason for this is many of the closing costs are fixed, and the price stays the same regardless of the home purchase price.  Example – the appraisal charge will costs about $425.00 regardless if the home purchase price $65,000 or $200,000. Ditto for the lender underwriting fee, it will stay the same regardless of the home purchase price.  There are other closing cost fees like this.

In Florida the home buyer will pay “customary” closing costs and the seller will also have their “customary” closing costs that they pay.  However, none of this is set in stone, who pays what closing cost is totally negotiable on the purchase contract.  One great benefit of the USDA loan is the program is still 100% financing and does not require any down payment.  In addition, the USDA Rural Development loan allow the home seller to pay all the buyers customary closing costs and prepaids escrows – up to 6% of the purchase price. This is great because many buyers can structure their purchase contract in a way where they put very little to $0 into the transaction.

Keep in mind all of the above is regards to a USDA purchase loan.  The USDA Refinance Closing Costs are often times less because the USDA refinance is more streamline and may not require a new appraisal and survey. Also keep in mind that some lenders /banks may advertise “no closing costs” mortgages. Although this may appear to be a great deal on the surface, most the time the lenders are just increasing the borrowers interest rate to cover the closing costs. There is nothing “unique” about doing a no closing costs loan, pretty much any lender can provide this option to a loan applicant if requested.

Read more about Typical USDA Loan Closing Costs here and other USDA RD Loan FAQ’s here.  Please reach out to us if you have any questions about getting started on your Florida USDA loan pre-approval, we want to help!  You can call ph: 904-302-6060 or just fill out the short information request form on the right side of your screen. We are open 7 days week 9am-8pm.

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