USDA No Down Payment Loans – How do you become USDA eligible?

The USDA loan program is sought after by homebuyers due to their 100% financing, affordable terms, and flexible credit qualifying. That is why it is so important to understand the basics on how to become USDA eligible.

In my opinion, the USDA program is still very underutilized, with many banks and lenders not even offering the program, or if they do, it is in a limited manner. We, at Metroplex, are here to change that! With today’s topic, I’ll explain exactly what a USDA loan is and how to qualify.

Now, before we get started, remember to take advantage and download our USDA Blueprint for Success with the link below.

This free guide is designed to walk you through the process step-by-step and is a great tool for both homebuyers and Realtors alike.

Key USDA Eligibility Requirements

1. USDA Eligibility- Property and Income

First off, to qualify for a USDA loan, the property you are interested in must be your primary residence and located within a USDA eligible area.

2. USDA Eligibility- Income

Remember, USDA loans are also income-based. Thus, the program calculates a total family household income, but not just for who is on the loan.

However, for loan qualifying, we can only use the income of whoever is on the loan. This is otherwise known as repayment income. 

Thankfully, the USDA has a very user-friendly site that can help determine if your property is eligible and also provide county income limits. Go here to search the USDA Property Eligibility Map.

3. USDA Eligibility – Credit Qualifying

While minimum credit conditions do apply, USDA loans can offer qualifying flexibility for previous bankruptcies, foreclosures, and short sales.  Exceptions are on a case by case basis, so if you have a scenario to discuss please inquire with my team.

In situations where there is a limited credit history, USDA guidelines also allow for non-traditional or alternative credit references. Common examples include verification of rent, telephone, or utility payment histories.

Lastly, remember that while USDA loans are thought of as being for first-time homebuyers, they are also available for previous homeowners.

USDA Approved Lender – What are the benefits?

Obviously, this is just a broad overview of the USDA program, but you can see from this information that it is possible to become USDA eligible and start your USDA journey in the right direction!

If you are a homebuyer looking to purchase a home in an eligible rural area, you may be able to qualify for this fantastic USDA program. Plus, as a USDA approved lender we understand the intricacies and importance of a USDA mortgage and can be your guide!

P.S. For more on the USDA home loan process and eligibility requirements, please download our FREE “USDA Blueprint for Success.”