What are THREE ways to Expand Housing Inventory with a USDA loan?
If you’re looking for ways to expand the current available real estate inventory, a USDA home loan can be a solution. The USDA loan program can be used for existing properties, home repairs, as well as for new construction.
In today’s video, I will share three ways in which a USDA home loan can be used to increase the available real estate inventory and thus provide buyers with more opportunity to purchase a home.
However, 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 designed to walk you through the USDA loan process step-by-step and is a great tool for both homebuyers and Realtors alike.
What are three ways to expand housing inventory with a USDA loan?
As a USDA approved lender, we are always looking for ways to help homebuyers and Realtors understand the full potential of the USDA program and available financing opportunities. As such, here are three ways to expand inventory with a USDA loan:
1. USDA Home Loans can be used for Home Repairs after closing:
USDA guidelines allow eligible home repairs to be included as part of the loan and be completed after closing. This can be utilized for homes that need a little TLC and then be able to bring the home up to USDA property requirements post-closing.
Thus, although home repairs can be included in a USDA home loan, it is important to remember:
- Repair costs are limited to the lower of either 10% of the proposed loan amount or $10,000;
- Repairs do not affect livability of the home or safety of the occupants.
- Common repair examples include, but are not limited to, plumbing, flooring, A/C units, and even roof repairs in certain situations.
- Appraised value must be high enough to finance in the required repairs.
Eligible repair types can vary and must be reviewed on a case by case basis. Please call my team with any scenarios so we can review and advise.
2. There are No Loan Limits on a USDA Home Loan
Unlike FHA and Conventional programs which have maximum mortgage amounts, USDA loans do not have loan limits. This can provide a buyer with more purchase power which can be extremely useful in today’s market.
Also, because USDA income limits were recently increased in May 2021 this provides additional firepower for those looking to purchase a home with a USDA loan and further helps to expand the available homes a buyer can search for.
3. USDA New Construction Loans
Under the USDA Single-Close feature, it provides new construction to permanent financing for Single-Family, Manufactured, and Modular Homes.
The key element of this feature allows for construction to occur after closing with draws being provided to the builder from the USDA loan construction proceeds which allows the various construction stages to occur post-closing.
When working with homebuyers interested in building a single family, modular, or manufactured home, a USDA new construction loan can offer options for homebuyers to help expand home inventory without a down payment.
Key points to remember about how to expand inventory with a USDA loan:
- USDA Home Repairs can be included after closing
- There are No Loan Limits on a USDA Home Loan
- USDA Construction Loans are available for SFR, Manufactured, and Modular Homes
Understanding the available features under the USDA loan program can help expand the inventory of options available for homebuyers in today’s market.
As a USDA Approved Lender, we will work with you to explain the USDA loan qualifying process step-by-step.
Metroplex Mortgage Services is licensed throughout Florida, Texas, Alabama and Tennessee. Just call or email to discuss your scenario and let us show you the “Metroplex” difference!
SeanS@MPLX.org
(800) 806-9836 Ext. 280
As always, I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!
