USDA mortgages offer 100% financing in select locations around Florida. The good news is Lake County is still eligible for the USDA Rural housing program in 2015. The USDA program continues to grow in popularity with Lake County home buyers searching for 100% financing. Eligible USDA areas of Lake County include – Clermont, Lady Lake, Astor, Eustis, Fruitland Park, Grand Island, Groveland, Howey In The Hills, Leesburg, Mount Dora, Sorrento, Tavares and Umatilla. As many buyers know, all the 100% home loan options in the past have evaporated. However, USDA still offers zero money down, low 30 year fixed rates, and flexible qualifying in 2015.
The United States Department of Agriculture (USDA) sets the lending standards for the program, which is followed by all USDA approved lenders and banks in Florida. Also known as the “RD” or “502 Guarantee” this program reduces costs for home buyers in rural and suburban areas. It is one of the most cost effective home buying programs in Lake County today. Since its inception in 1949, the USDA Rural Development loan has helped over 1 million home buyers obtain housing with little or no money down. In fiscal year 2011 alone, nearly 150,000 homebuyers benefited from the USDA RD program.
Who is Eligible for a USDA Loan?
The USDA mortgage is available to applicants who meet household income and credit standards. By household income, we mean the USDA rural housing loan has income limits in place for household, see below for more details on limits for Lake County. Loan qualification is pretty easy since the program doesn’t require a down payment or a high credit score. However, all applicants should have a min 620 credit score to be considered. Home buyers should make sure they are looking at homes within USDA approved geographic areas, because the property location is the most important factor for this loan type.
USDA Approved Locations – Eligible Map
As stated above, Lake County still remains 100% eligible. However, home buyers in Orange and Seminole County will want to check the map here for eligible areas as these counties are more populated and contain some ineligible areas. The seller of the home is not important, but the house must be located in a USDA eligible area. If you have questions about the map, just submit the short Info Request Form on the right side of this page for help. Mobile users can find the Info Request Form here. You can also contact us at 7 days a week at ph: 800-743-7556
USDA Home Loan Income Limits
USDA 502 Guarantee loans are available to moderate household incomes, which the USDA defines as those earning up to 115% of the area’s median income. For instance, a family of four buying a property in Lake County can make $74,750 per year.
Typically, moderate households find they are well within limits for the program. The Florida USDA 502 Guaranteed income limits can be found here. It’s also important to keep in mind that USDA takes into consideration all the income of the household….even household members that are NOT one the loan application. For instance, if a family has an elderly family members who receives social security, but is not on the loan, they will need to disclose their income for USDA eligibility purposes. The elderly members income does not need to be on the loan application or used for mortgage qualification. But the lender will always verify at all household income when figuring eligibility.
Key USDA Mortgage Features:
100% No Money Down Home Financing
Without a doubt this is the big draw as no other mortgage program in Florida permits 100% financing. The only exception would be a VA mortgage for military folks. USDA still allows for 100% financing of an eligible home’s purchase price, perfect for first time buyers in Lake County. Conventional and FHA mortgage loans require a minimum 3.5 – 10% down payment, which is out of reach for many home buyers.
The USDA Guarantee Fee
The lender guarantee is partially funded by the USDA mortgage insurance premium, which is 2.0% of the loan amount. The loan also has a 0.50% annual fee (monthly PMI) Example for a $100,000 loan amount, the upfront guarantee fee is $2,000 and the monthly premium is $41.67. The homebuyer can choose to roll the upfront fee into the loan amount or pay it at closing. 99% of buyers decide to roll the guarantee fee into their loan. Compared to other loan types, the USDA mortgage insurance (PMI) fees are the lowest. Read more about USDA guarantee fees here.
USDA Low 30 Year Fixed Rates
Lenders and mortgage companies offer USDA loans at very low 30 year fix rates. Since the USDA backs the loans, the risk is less for lenders making USDA loans a safe bet. USDA loan rates are often lower than those available for conventional and FHA loans. Home buyers who choose USDA often end up with lower monthly payments considering higher mortgage insurance fees associated with other loan types. Remember, even if you are already approved for a FHA loan, consider a USDA loan as well just for the mortgage insurance savings.
USDA Closing Cost:
USDA loans allow the seller to pay for the buyer’s closing costs, up to 6% of the sales price. Borrowers can also use gift funds from family members to help pay closing costs. Closing costs can also be rolled into the buyers loan, given the appraised value is high enough to support. For example, a home’s price is $120,000 but it appraises for $125,000. The borrower could open a mortgage for $125,000 and use the extra funds to finance closing costs.
USDA Savings Requirements:
Borrowers who don’t have all their closing costs paid for by the seller or otherwise need cash to close the loan will need to prove they have adequate assets. Two months bank statements will be required. There’s also a requirement that the borrower can’t have enough liquid assets to put 20% down on a home. A borrower with enough assets to qualify for a conventional loan will not qualify for a USDA RD mortgage.
USDA 2015 Credit Score Standards:
Most lenders and banks will want to see a min 620 credit score for qualifying. It’s important to remember, a 620 score does not guarantee loan approval. There are also additional requirements in place for any applicant(s) that have had a past bankruptcy, short sale, foreclosures, etc.
USDA Mortgage Source is Florida’s local USDA loan leader, serving you 7 days a week! Questions? just submit the short Info Request Form on the right side of this page for fast service. Mobile users can find the Info Request Form here. You can also contact us at 7 days a week at ph: 800-743-7556
update – 2015
Serving all of Florida including Lake, Seminole, Orange County – Astor, Bassville Park, Clermont, Eustis, Forest Hills, Fruitland Park, Grand Island, Groveland, Howey-In-The-Hills, Lady Lake, Leesburg, Mascotte, Minneola, Montverde, Mount Dora, Mount Plymouth, Sorrento, Tavares, Umatilla, Orlando, Winter Garden, Lake County USDA Loan Guide