USDA Loan Eligibility is a very basic process. A borrower's income and credit file must be underwritten just like any other loan program. However, USDA rural development loans are far more lenient when it comes to down payment requirements and credit score requirements. There are many great benefits to USDA Rural Development Loans. This loan program enables a borrower to obtain a mortgage with the cheapest possible monthly payment when compared with FHA loans and 3.5% as a down payment.
STEP ONE: Is your middle credit score above a 620? If so, then you may proceed with USDA loan eligibility. Do you have recent derogatory items on your credit report such as foreclosures, bankruptcies, judgments, tax liens, or collections? If so, then call me to discuss the details. For basic details, please see the following:
- Foreclosure- Must wait 3 years
- Bankruptcy- Chapter 7 must wait 3 years, Chapter 13 must wait 1 year
- Judgments- Must be paid and have none outstanding within 12 months
- Tax Liens- Must be paid and have none outstanding within 12 months
- Collections- May have one collection within the last 12 months
STEP TWO: Is the property you are looking to purchase in a USDA rural loan eligible area? Below, click accept, then select your state. Find your county on the map or on the list. If the county is not on the state list, then the entire county is INELIGIBLE for a USDA Rural Development Loan. If the property is located in the lighter colored area, then it is located in a USDA Loan Eligible area. The USDA loan eligibility map will state whether or not the property is approved for USDA.
STEP THREE: Does your total household income meet the USDA Income Requirements? There are two separate income levels. The first level is for a household of 1-4 family members. The second is for 5 or greater. Every county varies on the total household income limit. The limits typically range from 70,000 (1-4 members) to 110,000 (5+ members). Below, enter your state, then enter your county and follow the next steps.
STEP FOUR: Apply online, over the phone at 770-631-5750, or in person. USDA Rural Housing Loans take approximately 30 days to complete. If you have questions, contact me or visit TheUSDAhomeloan.com or contact your local loan officer.