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Can a teacher qualify for a USDA loan if they are changing school districts?

August 18th, 2017 by usdaadmin

Are you able to close on a home with a USDA loan after a teaching contract has been signed, but before your first day of school?

In today’s video, I will explain how a teacher can qualify for a USDA loan if they are changing school districts and further share with you the facts on how a USDA loan can help teachers purchase a home.

And if you have not yet done so, feel free to download our newest “USDA Blueprint” with the link below. This free guide is designed to help walk you through the USDA process step-by-step and is a great educational resource for both homebuyers and their agents.

Can a teacher qualify for a USDA loan if they are changing school districts?

There can be tremendous excitement after one has accepted an offer to start a new position, but many times that quickly turns to frustration when trying to coordinate moving, purchasing a home, preparing for the first day on the job, and when the first pay date will be in order to verify income.

Tampa FL USDA Approved Lender ListFortunately, we have worked with these situations before and are able to confirm that USDA guidelines offer flexibility for certain professions where employment is accompanied by a firm offer letter along with meeting other terms.

As a starting point, USDA guidelines state “For those applicants about to start a new job, if the applicant has a firm offer letter from the new employer indicating the job that will begin within 60 days of loan closing, the income is acceptable for qualifying, and repayment, purposes.”

Additionally, “The lender must also verify that the applicant will have sufficient income or cash reserves to support the mortgage payments and any other obligations during the interim between loan closing and the start of employment.”

Further, the following example is specifically provided “This may be appropriate for situations such as a teacher whose contract begins with the new school year, or a physician beginning residency after the loan is scheduled to close.”

While this can provide flexibility for certain situation, remember guidelines also confirm that “if the loan will close more than 60 days before the employment begins, the income cannot be counted for repayment purposes.”

Tampa FL USDA Approved Lender ListAs a USDA Approved Lender, we are permitted to document the approval with a copy of the employment contract which validates the income when traditional pay stubs are not yet available to support the income earned from the new employment.

In summary, it can be possible for a teacher to qualify for a USDA loan if they are changing school districts and also be able to close on a home after a teaching contract has been signed provided certain requirements are met.

As a USDA approved lender, we are here to help. Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Click here to download our USDA Blueprint for Success!

Tampa FL USDA Approved Lender List

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