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Can you qualify for a USDA loan if you own another home?

November 5th, 2021 by Sean Stephens

Can you qualify for a USDA loan if you own another home?   Do you have to sell your home before you can qualify for a USDA loan? Can you have two USDA loans at the same time?Tampa Florida USDA Approved Lender

As you can imagine, these are all common questions that we receive.  In today’s market, a homebuyer needs every qualifying advantage that is available!

In this short video, I will explain how to qualify for a USDA loan if you own another home, provide answers to these questions, and break down the USDA guidelines 1-2-3.

Now, before we get started, don’t forget to take advantage and download our USDA Blueprint for Success with the link below. This free guide is an educational resource that walks homebuyers and Realtors through the USDA process step-by-step.

Can you qualify for a USDA loan if you own another home in Alabama, Florida, Texas, or Tennessee?

Remember that the USDA Single Family Housing Guaranteed Loan Program (“SFHGLP”) is designed for applicants to purchase primary residences.

With that being said, USDA guidelines state the following for situations when an applicant already owns a dwelling:

An applicant who owns a dwelling to which they will retain ownership may be eligible for a guaranteed loan. It is not the intent of the SFHGLP to assist borrowers in building an investment portfolio.Sebring Florida USDA Loan

However, in cases where the applicant does own another dwelling, they may still purchase another home with a USDA loan if the following criteria are met:

  • The homeowner’s current dwelling is not financed by a Rural Development guaranteed, direct Section 502 (including cosigned obligations), or 504 loan or active grant.
  • The homeowner will occupy the home financed with the guaranteed loan as their primary residence throughout the term of the loan;
  • The homeowner is financially qualified to own more than one house;
  • The loan applicant is limited to owning one single family housing unit, whether adequate or inadequate, other than the house associated with the loan request.”
  • The current home owned no longer adequately meets the applicants’ needs. Examples include, but are not limited to:
    • Relocation due to a new job opportunity.
    • Requires a larger home to provide for a growing family.
    • Obtaining a divorce and the ex-spouse will retain the dwelling.
    • Is a non-occupying co-owner or co-borrower on another mortgage loan and wants to purchase their own dwelling.

Therefore, while it is not possible to have two USDA loans at the same time, it is possible to already own a home that is not financed by another USDA loan and still qualify for a new USDA loan on the property being purchased.  However, specific criteria must be met!Can you qualify for a USDA loan if you own another home in Alabama, Florida, Texas, or Tennessee?

As a USDA Approved Lender, we are here to help answer your questions and walk you through the qualifying process and help maximize your qualifying ability.  Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

800-806-9836 Ext. 280
SeanS@MPLX.org

I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!

P.S. – You can download our “USDA Blueprint for Success” by CLICKING HERE.

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