Are USDA loans only eligible for First Time Homebuyers?

Are USDA loans only eligible for First Time Homebuyers?

USDA Home Loans are sought after by First Time Home Buyers, but can previous homeowners also qualify for a USDA loan?

While many may think that USDA loans are only eligible for First Time Homebuyers, in today’s video tip will keep you in the know about key points on who can be eligible for a USDA loan.

And if you have not yet done so, remember to download our USDA Blueprint for Success with the link below, this complimentary guide is designed to walk you through the USDA qualifying process step-by-step and is ideal for both homebuyers and Realtors alike.

So, are USDA loans only eligible for First Time Homebuyers?

While many commonly associate the USDA Rural Home Loan Program with First Time Home Buyers, it is true that previous homeowners may also be eligible for a USDA loan.

For example, after a home is sold and the previous homeowner now wants to look to purchase again and provided it is a primary residence, a USDA loan may be an extremely attractive option because of the many benefits such as:

• 100% Financing
  • Remember that USDA Loans allow for No Down Payment;
  • This can help to save as much of their proceeds as possible from the previous sale.

• The ability to finance closing costs up to the appraised value
  • USDA Loans allow you to finance closing costs if the appraised value is higher than the purchase price
• USDA Loans allow for credit qualifying flexibility which can help with:
  • Previous short sales, Bankruptcies, and Foreclosures

Now, if an applicant wants to purchase their next home with a USDA Guaranteed loan prior to selling their existing property, they can still be eligible if the following are met:

• The current home is not financed by a USDA Rural Development Loan because are not able to have two USDA loans at the same time which include Section 502 or 504 loans, or active grant;
• The homeowner is able to qualify to own more than one house;
• An applicant is limited to owning one single family property other than the one being purchase with the USDA loan;
• Homeowner will occupy the home financed with the USDA loan as their primary residence throughout the term of the loan; and
• The current home no longer adequately meets the applicants’ needs such as in the following examples:
  • Manufactured homes that are not fixed on a permanent foundation
  • Applicant(s) that have relocated to a new employer, or is being transferred by the current employer to an area not within a reasonable local commuting distance

In summary, while the USDA Rural loan program is a fantastic option for First Time Home Buyers, previous homeowners are also eligible to take advantage of the many qualifying benefits that a USDA loan offers.

Remember that minimum credit conditions will apply and sufficient equity may be required on all programs.

Remember, 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.