- 0% downpayment with a USDA loan. Only certain areas qualify for a USDA loan and this loan requires a slightly better debt-to-income ratio that other loans, but it is a great option for someone who has no money for a downpayment
- 3.5% downpayment with a FHA loan. This loan is probably the most common loan first-time home buyers use and has some of the lowest requirements to qualify.
- 5% downpayment with a Conventional loan. Conventional loans require a higher credit score but can provide a lower monthly payment amount for buyers because it has a lower cost for mortgage insurance. There are conventional loan programs for 10% or 20% down as well that might have better terms and some lenders even offer a conventional loan with only 3% down.
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®