What are the USDA property eligibility requirements for a home with a pool?
There is a myth floating around that USDA property eligibility requirements will not allow for homes with in-ground pools. Thankfully that myth is FALSE, but if you are purchasing a home with a pool and want a USDA loan, there are some details you should know about! USDA property eligibility requirements have specific guidelines which have to be followed in these cases. This week’s USDA loan video tip is a reminder of how a USDA Rural Home Loan can help you purchase the home of your dreams, including the pool!
USDA property eligibility requirements allow for financing homes that have above ground pools without additional requirements. However, for an in-ground pool there are some extra steps needed. USDA property eligibility requirements specify that when financing a home with an in-ground pool, the loan amount is based on the value of the home without any credit given to the pool.
The USDA appraisal will list 2 separate values for the property:
-One including the pool for the total market value
-One without the pool for USDA loan amount purposes
For example, if the property is appraised with the pool at $100,000 but the pool is valued at $10,000 then the loan will be for $90,000. This works best with under market valued properties such as short sales, foreclosures, and other distressed properties. Additionally, this can still be a good option when the buyer is willing to bring additional funds to closing to make up the difference because they want to take advantage of the low USDA Monthly Premium instead of paying the higher monthly FHA Mortgage Insurance.
For more information, visit USDA Property Eligibility Requirements.
Make sure to watch more videos on how to qualify for a USDA loan.
The main point to take away from this is that USDA property eligibility requirements do allow financing of properties with in-ground pools. This may seem complicated, but that is what we are here for! Just call or email to discuss your scenario and let our USDA experience go to work for you.
Email: SeanS@MPLX.org
Toll Free: (888) 815-3505 Ext. 280
Before we go, I have a question for you: What time of the year do you think is the most active for purchasing a home? Spring, Summer, Fall or Winter? Please share your comments below!
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What are USDA Income Limits for the USDA Guaranteed Loan Program?
What are USDA income limits and how are they calculated?
The USDA Guaranteed loan program provides the opportunity of 100% financing for Americans living in rural areas who meet the USDA income limits. This is a critical part of the USDA qualifying process and something that needs to be analyzed as early as possible because it can be the judge and the jury which decides if a home buyer meets the eligibility criteria. To qualify for a USDA guaranteed loan, it is required that you fall within the USDA income limits of the eligible county you are purchasing a home in. This video will explain more on the qualifying process for the USDA income limits.
USDA income eligibility requirements are set by calculating 115% of the county’s median income; this can vary from state to state and county to county. USDA guidelines require that the total income from all household members is calculated, regardless of who is on the loan. Applicants must have adequate and dependable documented income with a work history of usually two years. The USDA determines an applicant’s income in two ways: repayment income and annual income. It’s important to know and understand the difference between the two when applying for a USDA home loan.
Qualifying income, also known as repayment income, is determined by the actual loan applicants who are able to meet qualifying standards and be part of the loan. This income is used for debt ratios, to determine if the applicant has the ability to make the monthly payments, and will include only stable and dependable income as verified by underwriting. These include but are not limited to: W2 wages, pensions, social security, and self employment income as evidenced by tax returns.
However, annual income calculations are used to determine the actual household income and will include the total eligible income of all applicants and adult household members. This total income can be different than qualifying income depending on who is on the loan versus who just lives in the home. Also, if an additional household member is not on the loan, we will still need to provide evidence and verification of their income in order to determine if the income falls within the USDA guidelines for that county.
This can be confusing, to the other household members who may ask: Why is this necessary since I am not on the loan? Simply answered, this is a requirement that must be followed if they want to be part of the many benefits that come along with the USDA program.
Income calculations vary from state to state and from county to county. For USDA Income Limits in your area- Click Here!
Taking the steps towards home ownership may be overwhelming; let our unique experience and expertise to help with each step of the process. For more immediate scenarios- click here to apply online for a USDA mortgage today!
If you already have an existing pre-qualification in process or experiencing financing issues on an existing transaction, please take advantage of our free 2nd opinion service to double check where you stand.
Just call or email to discuss your scenario and let us show you the “Metroplex” difference!
Email: SeanS@MPLX.org
Toll Free: (888)815-3505 Ext. 280
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