What is a USDA loan and how do you qualify?
What is a USDA loan and how do you qualify?
Today’s video tip is great for any buyer that may have questions, so if you are a Realtor, you have my permission to forward and share this with your clients.
In my opinion, the USDA program is still very underutilized, with many banks and lenders not even offering the program, while others do so in a limited manner. Today’s topic will answer the question on what is a USDA loan and explain how to qualify.
What is a USA loan and how do you qualify?
First off, the property being purchased must be a primary residence and be located within a USDA eligible area.
Also, USDA loans are an income based program which calculates total family household income, not just who is on the loan. However, for loan qualifying we can only use the income of whoever is on the loan, or otherwise known as repayment income.
Thankfully, USDA has a very user friendly site that can help determine if your property is eligible and also provide county income limits for each state.
While minimum credit conditions do apply, USDA loans can offer qualifying flexibility for previous bankruptcies, foreclosures, and short sales. Exceptions are case by case, so if you have a scenario to discuss, please inquire with my team so we can start to review.
In situations where there is a limited credit history, USDA guidelines will also allow what is called non-traditional or alternative credit references such as verification of rent, telephone, or utility payment histories as common examples.
Remember that while USDA loans are thought of as being a first time homebuyer program, they are also available for previous homeowners.
Obviously this was just a beginning and a broad overview, but I wanted to share with you answers to common questions that we receive and help get your USDA journey started in the right direction!