USDA Purchase

It is important to note that occupation has nothing to do with USDA loan eligibility. There is no need to be a rancher, farmer, or herder of any sort to gain all the benefits of this loan program. Below is a list of determining factors for this loan option.

• The home must be owner occupied as a primary residence meaning upon closing and for the near future (6 months) you must be planning on living there full time.
• You must purchase a home in a USDA qualifying area – click below and follow the instructions to search a property address or zoom in on the map of the area you are looking at – https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp – click accept on the right hand side of the screen then either input address or zoom in on the map for the boundaries. The highlighted areas are ineligible, the rest of the areas qualify.
• You must income qualify and your net income must be over a certain amount. We do recommend you talk to your loan officer about this part because it is based on your family size, goes off of net income (not gross), and can take other things into consideration, like child care costs and expense. You can see the basic guidelines by clicking here and picking your state, county, inputting size of family, and net income. https://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do?pageAction=state – While you don’t want to make too much to qualify for this option you do need to typically be around 29/41 on your front/back debt to income ratios. You can go higher in certain cases with an automated approval which usually needs a 660 or higher credit score.
• Credit scores can be as low as a 581 (with no new negative credit in the past 12 months) but your debt to income must be below 29/41 for front and back ratios. Front is your total house payment including insurance, property taxes, and any homeowners associations dues compared to your total gross income and back refers to your total payments like house, car, credit cards, student loans, etc. compared to your total gross income. It is always good to consult with your loan officer when determining these ratios because certain things are deal specific. For example, many times an installment loan like a vehicle doesn’t have to be counted in your ratio when under 10 months.
• You must be a US Citizen or Permanent Resident
• You must have dependable income usually for at least 24 months unless in same field and recently graduated
• USDA guaranteed loans have no maximum loan limit but we do have to take into consideration the size of the family. A family of three will typically not be approved for a 6 bedroom house on a USDA loan unless there is a good explanation as to why this is needed.

USDA does direct loans for those in need that are usually subsidized by the government for those who can’t qualify for the Guaranteed option. All USDA loans are backed by the US Department of Agriculture. Loan Guarantees – This type of USDA loan is issued by participated local lenders, like Skyridge Lending, LLC. This option allows for low mortgage interest rates fixed for 30 years and no down payment. Direct Loans – These loans are issued directly from the USDA for low and very low income applicants. This loan option subsidizes part of the monthly payment and has rates available as low as 1%. Please contact USDA directly to see if you may qualify for this option. Home Improvement Loans and Grants – This loan or grant option permits current homeowners to repair and upgrade their homes with the help of USDA. Some people may even qualify for a combined loan and grant of over $20,000 worth of assistance.

If you’ve been on a USDA loan for at least 12 months then you can qualify for a streamline refinance that drops your rate and payment. This is a great option because you can lower your payment without having to do an appraisal, income, or even credit qualifying as long as your payment has been made without being over 30 days late. Call us today for a no cost assessment.