USDA Loans are designed to help improve the economy and quality of life in rural America.
They are insured or guaranteed by the U.S. Department of Agriculture (USDA). Borrowers need to anticipate extra steps with USDA loans because both the mortgage company and USDA have to underwrite the file. We have experience in doing USDA loans and can make this a seamless process for our borrowers.
LOAN TO VALUE (LTV)
USDA loans require a 640 minimum credit score. The maximum debt to income (DTI) ratio allowed on a USDA loan is 41%. There is a 1% funding fee on USDA loans that can be rolled into the loan amount, giving borrowers a true zero down option.
In order to qualify, borrowers must meet the income limits of the program. The income limit varies depending on the county you are purchasing in, the number of people in the household, and must include the income of all the people that live in the home.
There are two types of mortgage insurance required on a USDA loan. The funding fee (typically 1%) which can be financed into the loan and the monthly housing fee (typically .35%) which is added on to the monthly payment.
The property must be in a USDA eligible area geographically and typically this means a more rural areas of the country.