Homebuyers in Sebring, Avon Park, Lake Placid, Palmdale and surrounding communities can purchase a home with NO down payment thanks to the USDA rural housing loan! USDA Rural Development mortgage is offered by approved USDA lenders in select locations around Florida. The great news is all of Highlands county and Glades county is eligible for the program! USDA home loans are especially a good program for first time home buyers that have little cash savings for other loan programs that require a down payment.
Even if you are a home buyer that has 3% or 5% for a down payment, you should take a close look at the USDA loan. Why? mortgage insurance!! The monthly mortgage insurance (PMI) with a USDA loan is much cheaper per month when compared to FHA or conventional loans. The USDA program even allows the home seller to pay all the buyers closing costs resulting in little to $0 out of pocket money from the home buyer. The primary hurtle to homeownership is down payment, especially for first time home owners. With the 100% USDA mortgage homeownership is still possible.
How does a new borrower know they qualify for a USDA/ RD mortgage?
To be approved for this loan there are 2 primary factors: First, you must purchase a home in a rural eligible area. Again, all of Highlands County – Avon Park, Lake Placid, Leisure Lakes, Lorida, Sebring and Venus and Glades County – Buckhead Ridge, Ortona, Palmdale, Lakeport and Moore Haven is approved for the program.
Second, the household income must be below the set limits that are in place for each county in Florida. Click here for more details on USDA income limits.
As for USDA loan pre approval and loan qualifying, below we have listed some important factors:
- Debt to income (DTI) : Banks and mortgage companies will take a look at your debt-to-income ratio. The PITI (mortgage principal, interest, taxes and home insurance) must be less than 30 percent of your monthly income. All additional monthly debt can be no more than 42 percent of your income. These limits can be slightly exceeded sometimes with strong compensating factors.
- USDA credit score requirements: 620 and above is needed by most lenders. Additional requirements may apply in for any home buyers that have had a past Bankruptcy , short sale, foreclosure, etc
- Job and work history: solid 2 years history is needed. Does not need to be with the same employer, just more “continuous” This rule does not apply to recent college grads.
Keep in mind, USDA Rural Development has two different types of mortgage programs. The USDA direct program and the 502 Guarantee program. The USDA direct program is given directly by the USDA. The 502 Guarantee program is given only by approved lenders and banks. In most cases, lower-income borrowers will use the direct program. Moderate income households will use the 502 Guarantee program.
| USDA Direct Loan | 502 Guaranteed Loan | |
| Loan made by | USDA Directly | Third party (such as a mortgage lender, broker, bank) |
| Use | Low-income consumers | Higher income ranges |
| Income Standards | Household income less than 80% of area median | Household income less than 115% of area median |
Need more information? Just submit the quick info request form on this page, or call 800-743-7556.
Visit us at our home page for more information on the Sebring, Avon Park, Lake Placid – USDA 100% Home Loan.
Highlands County – Avon Park, Lake Placid, Leisure Lakes, Lorida, Sebring and Venus. Glades County 7 days a week including Buckhead Ridge, Ortona, Palmdale, Lakeport and Moore Haven, 2020