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.
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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.
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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How Can Rapid Rescoring Help Your Credit Score Qualify for a USDA Loan
Many homebuyers ask: How can I qualify for a home loan if my credit score just misses?
That is a great question and thankfully we have solutions. This short video will explain how rapid rescoring can help maximize the built in potential of a home buyer’s credit score in as little as 3 to 5 days! Beware though, this is a powerful tool that can help towards becoming “mortgage ready”– so let’s get started with the details!
Here are the 3 Steps to a successful Rapid Rescore:
Step One: The credit report is reviewed and analyzed for any potential improvements through both a manual review and through automated credit score simulation software. We are then able to determine how much of a potential increase in score can be achieved and what actions need to happen in order to get there.
Step Two: Once the targeted accounts have been paid down, the customer then calls their credit card or finance company and requests a letter documenting the current account balance. Once this has been received, we can then start the final steps of the process.
Step Three: We then submit the balance letter documentation to our credit vendor who works directly with the credit bureaus to update the balances. Once the balances are updated we are given notification to reprocess a new credit report. The process takes usually 3-5 business days to complete after the updated balance letters have been submitted.
Here are a few helpful reminders about rapid rescoring:
To read more information on credit score eligibility for a USDA loan – CLICK HERE.
Also, watch this video on how to qualify for a USDA loan with collections.
Taking the steps toward homeownership may seem overwhelming; let our unique experience and expertise to help with each step of the process.
Just call or email to discuss your scenario and let us show you the Metroplex difference.
Toll Free: (888)815-3505
Don’t forget, we are known for returning calls, replying to your emails, and responding to voice mails.
By the way, I wanted to thank you for the continued referrals and please keep those emails with questions and scenarios coming. For future video tips you can subscribe for free on the right and forward with the share button below.
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3 Loan Programs that offer a Low or NO Down Payment alternative
Thankfully with FHA, VA, & USDA Rural Home Loans there are three great options to work with for both Low and NO Down Payments. These loan programs are able to help in case you are unable to come up with a 20% down payment. Below I have listed highlights of each of these loan programs that offer either a low down payment or 100% financing alternative.
1) USDA Loan Program – The USDA Rural Home loan program is through the U.S. Department of Agriculture. It is a rural housing program that allows for 100% financing in designated eligible “Rural” areas and offers NO down payment! The USDA loan program also allows the ability to finance closing costs up to the appraised value. This is a great option for helping to minimize out of pocket expenses while still maintaining an affordable payment. (To find eligible areas and income limits CLICK HERE)
2) VA Loan Program – U.S. Department of Veteran Affairs allows 100% financing for eligible service members who include: Active Duty, Veterans, Reservists, & Surviving spouses. The VA loan program offers 100% Financing!
We thank all of our military heroes for their service to our great country!
3) FHA Loan Program – Federal Housing Administration offers a lower down payment minimum of 3.5% of the sales price. Unlike the USDA Loan program, there are no income or area restrictions but there are loan limits on a per county basis. The FHA Mortgage Insurance Premiums are the highest monthly fee of the programs listed which can affect affordability.
Each of the Government Loan Programs discussed today are different but share common themes such as:
* Flexibility with less than perfect credit & lower scores
* However, remember minimum credit conditions do apply
* Affordable alternatives for home buyers
* Only for primary residences
* Not restricted to ONLY First Time Home Buyers
* Previous homeowners can be eligible as well
Watch this short video for more information and how to be pre-qualified to purchase a home. Also for more details about the difference between USDA Rural Home Loans and the FHA loan program - CLICK HERE.
Just call or email to discuss your scenario and let us show you the Metroplex difference!
Toll Free: (888)815-3505
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I wanted to thank you for the continued referrals and please keep those emails with questions and scenarios coming. Don’t forget, we are known for returning calls, replying to your emails, and responding to voice mails.
How do you qualify for a USDA loan if you already own a home?
As more and more home buyers are trying to take advantage of an affordable housing market, many may already own a home and ask the common question “How do you qualify for a a USDA loan if you already own a home?”
Generally speaking, it will be difficult to qualify for a USDA loan if you already own a home but there are exceptions to this rule which include:
There are further details for each of these exceptions listed, which can affect how you qualify for a USDA loan if you already own a home – so watch this short video for more information.
Remember though, USDA loans will NOT permit financing of second homes or investment property. USDA Rural Home loans are for primary residences only and there are NO exceptions for that. Please keep in mind that minimum credit conditions will apply on all programs that we discuss.
Just call or email to discuss your scenario and let our USDA experience go to work for you.
Toll Free: (888) 815-3505
P.S. Don’t forget to share with us a positive real estate story that you have experienced!
What is the difference between USDA and FHA financing?
This is a very common question asked and due to the recent FHA Mortgage Insurance Premium (MIP) increases it is important to realize the true costs of each loan program.
This short video compares USDA Loans vs. FHA Loans and explains what is the difference between USDA and FHA financing. If you are a first time home buyer or a Realtor that works in USDA eligible area, this is a must see video tip!
Finding out what is the difference between USDA and FHA financing can be difficult for First Time Home Buyers because a majority of banks and lenders do not offer the USDA program so it is hard to get straight answers?
Toll Free: (888) 815-3505
I wanted to thank you for the continued referrals and please keep those emails with questions and scenarios coming. Don’t forget, we are known for returning calls, replying to your emails, and responding to voice mails
P.S. – Don’t forget to comment below with your thoughts about the recent FHA Mortgage Insurance increases.
What are the Benefits of a USDA Rural Home Loan?
Do you know all of the benefits of a USDA Rural Home Loan? These are great tips to help maximize your pre-qualification. Whether you are a first time home buyer or even if you currently have a USDA Loan, make sure to watch this week’s video so you can reap the full benefits of a USDA Rural Home Loan.
Can you finance closing costs with a USDA loan? Can you qualify for a USDA loan with a recent short sale? Do USDA loans offer 100% financing? These are all great questions when trying to understand the full power and benefits of a USDA Rural Home Loan.
Getting qualified for a USDA Rural Home Loan may seem overwhelming, but we offer the unique experience and expertise to help with each step of the process.
Please contact us if you have any of the following:
1. Tough Scenarios and just need to explore your options
2. Maybe you are close to qualifying, but were just turned down by a bank
3. You need a lender that specializes in USDA Loans
Remember, if you have an existing pre-qualification 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 our USDA experience go to work for you. Contact us by email: SeanS@MPLX.org or by phone at (888) 815-3505.
How do USDA Manual Underwriting Guidelines help?
Many are familiar with the term, but how can you really benefit from a lender that works with USDA Manual Underwriting Guidelines?
USDA Manual Underwriting guidelines are not offered by all lenders and it is a much more intensive review of the qualifying process. However, this stringent process gives us the advantage to approve a loan that would normally have been denied.
When working with USDA Manual Underwriting Guidelines, we are able to qualify with credit scores down to 620 where most lenders will only process a file with an automated approval with scores starting at 640.
USDA Manual Underwriting Guidelines also help in cases where there are recent short sales, foreclosures, or bankruptcies that are less than 3 years old which USDA has for a minimum requirement. For example, when someone is trying to qualify for a USDA loan after a recent short sale which was caused by a job transfer, this would not fall within the standard guidelines, but could be eligible under USDA Manual Underwriting Guidelines.
It is important to point out that, any loan falling under USDA Manual Underwriting Guidelines will be approved on a case by case scenario and also based on any supporting documentation required by underwriting.
Taking the steps towards homeownership can be challenging, but my team is built to help you become mortgage ready! Let our experience go to work for you!
If you would like more details on how to qualify for a loan under USDA Manual Underwriting Guidelines, please contact me for more details.
For more information, contact us at (888) 815-3505 or by email at SeanS@MPLX.org. Feel free to subscribe for free on the right and forward this video with the share button below.
This week I wanted to share some great First Time Home Buyer tips of what NOT “To Do” while going through the USDA Home Loan process. These are great reminders to help a First Time Home Buyer stay on the right track and can be helpful for both during the pre-qualification stage and right before the USDA Home Loan process begins.
Qualifying can be complicated and there are many situations that can be avoided which will be covered in today’s short video tip. This is a must see video quick tip for any First Time Home Buyer and something to share with anyone looking to start the USDA Home Loan process.
By the way, if you want to know about more First Time Home Buyer tips for success, how to qualify for a USDA home loan, or if you would like me to cover any credit topics, please comment below with your suggestions.
This week I wanted to share some great First Time Home Buyer tips for those who are trying to qualify for a USDA Home Loan. This is a great “To Do” list to help a First Time Home Buyer stay on the right track when qualifying for a USDA Home Loan. As we all know, there are many situations that come up during the loan process that can hurt the chances of qualifying for a USDA Home Loan and mortgages in general. Many things we take for granted, but this is a must see video quick tip for any First Time Home Buyer and something to share with anyone trying to qualify for a USDA home loan.
Whenever a First Time Home Buyer is trying to qualify for a USDA Home Loan it can be challenging, but my team is built to help you become mortgage ready! Let our experience go to work for you!
Metroplex Mortgage Services
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We lend in the following states: Florida, Tennessee & Texas
Any loan program may require sufficient equity and certain conditions may apply