How do you Qualify for a USDA Home Loan?
Qualifying for a USDA Home Loan
One of the more common questions I am asked from homebuyers is how do you qualify for a USDA home loan or how do I maximize my pre-qualification for a USDA home loan. Due to the many program options and unique features available, this is a great video tip for realtors and homebuyers alike when going through the USDA qualification process.
Maximizing Pre-Qualifications for a USDA Home Loan
- 100% Financing: One of the more well known features of the program. This allows first time homebuyers and others looking to purchase a primary residence to save money when purchasing a home.
- USDA provides the flexibility to finance closing costs up to the appraised value: Other loan programs will offer the seller to pay closing costs or the buyer to pay for their own.
- 640 credit score for automated approvals: Gives flexibility for higher debt ratios and in cases of previous credit issues.
- Manual underwriting provides exceptions for: Credit scores down to 620 and zero score or thin credit buyers. Remember that not all lenders offer manual underwriting.
- Home repair financing option: Unique option under the USDA program which is great for foreclosures and short sales. Allowable items to be financed include A/C units, flooring, plumbing and any items that would not affect the livability of the home.
If you are a realtor working with a client or a homebuyer wondering how to qualify for a USDA loan but are unsure of the ability to do so, or are interested in seeing if an approval limit can be increased, please contact me directly to discuss the USDA qualification process and the unique benefits of a USDA Home loan.