The USDA (United States Department of Agriculture) 502 Guaranteed Home Loans was created to help Florida residents who have moderate, income in obtaining a home with no down payment needed. Home buyers in other states can learn about the National USDA mortgage here. The first major requirement must be that the home is located in an eligible rural area. Contact us to discuss your location in detail. The second requirement is the income for family must be below the income limit set for the county they wish to purchase.
Basic USDA Rural Housing Loan Eligibility Requirements Include:
Must purchase a home in a USDA approved location. * Home seller is not important.
Must have a steady source of income of up to 115% of adjusted area median income (AMI).
620+ credit score is needed for loan approval.
Do not have the means for to qualify for conventional mortgage credit – 20% down payment.
The applicant must not be delinquent on any debts, judgments.
The USDA Loan Program is not limited to Florida first time home buyers. The mortgage program was developed to assist eligible homebuyers, regardless of whether they have previously or currently own a home. However, there are some important things to consider regarding USDA occupancy and property requirements as we will outline below.
USDA Property Requirements:
The USDA Guaranteed Home Loan Program helps lenders in becoming more open to lending to moderate income families who may not meet requirements of other conventional mortgages. USDA Home Loans can be used to purchase new or existing dwellings located in approved areas.
Buy a new or existing single-family home.
Buy a new manufactured home (* financing must be arranged by the approved dealer selling the mobile or manufactured home)
USDA Rural Housing Loans are only for your primary residence and must be in livable condition. The homes need to be modest in size, design, and costs. They must meet standard building codes and located in an eligible rural area.
Are You Eligible For USDA?
The applicant cannot have had a previous Rural Development loan that resulted in a loss to the government, unless the reason was beyond the control of the applicant’s, and with it being a determined fact by the Rural Housing.
Borrower cannot presently own a home in the local commuting area.
The applicant must be a citizen of the U.S., if the applicant is a non-citizen, he/she must be a qualified alien.
The applicant must have the legal capacity to take on the loan obligation.
The applicant must personally or have the ability to occupy the property as a permanent home.
- 100% Financing – you can buy a home with no money down. In some cases you can even finance your closing costs or add to you loan.
- You can refinance your home up to 100% of the value of your home thanks to USDA streamline refinance.
- 30 year Fixed Rate Mortgage Options.
- USDA loans are easily obtained because the Government insures the loan so that there is much less risk to the lender.
- They can be used for Existing Homes, Foreclosures or New Construction. The home sellers is not important, just the location.
- There is No Prepayment Penalty.
- Flexible Credit Requirements.
Some common misconceptions about the USDA mortgage:
- They are reserved only for ranchers and farmers – USDA loans are not “just for farmers,” many people in 2016 qualify just outside of major cities like Orlando, Tampa, Jacksonville, Naples, Sarasota, Tallahassee, etc.
- FHA or Conventional mortgages are better – USDA home loans often offer better terms than an FHA or conventional loans.
- Only certain applicants can qualify – Anyone who meets the income and credit guidelines can qualify for a USDA home loan.
- They are only for rural areas – Actually, USDA Loans are available in many areas that most people would not consider rural. For example, many small communities just outside of metropolitan areas in the Florida qualify as rural areas according to the US Department of Agriculture.
- They are harder to get than FHA or Conventional Loans – This just isn’t true. In many cases USDA Loans are actually easier to get because the loans are backed by the federal government.
- USDA loans take too long to close. Yes, it’s true that USDA loans through a two tier approval process, and this can take a week longer to close. However, the 60,90 day closing turn times most people read is not true. In Florida, USDA can close in as little as 35 days.
Questions about getting approved? Contact USDA Mortgage Source 7 days a week at ph: 800-743-7556 or just submit the Info Request form on your screen for expedited service.
USDA Loan, Are You Eligible?