USDA Home Loan Facts

USDA Home Loan FAQs

The U.S. Department of Agriculture (USDA) has been helping people purchase homes with a variety of programs for a long time. The USDA has a rural housing guaranteed loan program which offers assistance to residents who meet certain income requirements and are looking to purchase a home in certain geographical areas. Below are basic qualification requirements for this loan program. Please feel free to contact us with any additional questions about this program or how we can help you utilize this to get into your own home!

Property Requirements > Only single family non-farm residences, approved condos and PUDs
> Located in a designated RHS rural area
> Ineligible properties include manufactured homes, properties with swimming pools (some exceptions) and properties in a flood or mudslide zone (with exceptions)
Resident Requirements > Resident must be citizen or legally admitted alien
> Resident cannot have owned a home is the last 3 years (some exceptions)
> Residence must be owner-occupied primary residence
> 640 minimum credit score is required
> Income requirements for greater Austin area are no more than $84,000 (1-4 person household or $112,050 (5-8 person household)
Loan Requirements > 30-year fixed rate mortgages only
> Qualifying ratios are 29% (Mortgage v. Income) and 41% (Debt v. Income)> Maximum loan amount is 100% of purchase price, with restrictions on LTV
> 3.5% Guarantee Fee added to the loan by USDA to cover insurance & all other fees
Closing Costs and Misc. > Up to 6% of the sales price can be contributed by interested parties (seller/builder) towards all closing costs
> NO mortgage insurance required
> NO down payment required

Kyle Pfaffe, REALTOR®



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