USDA – Upcoming Changes

USDA is one of the few true 100% loan programs out there. The US Department of Agriculture (USDA) established their “rural housing services” department in 1994 – so this program has been around well before the housing crisis of 2007.

Two main eligibility requirements on USDA are:

  1. Income Limit
  2. Property Location

But it’s really not that rural of a program and your income eligibility is based on family size and there are ways to offset income to help you qualify. . .

Check out this link to see if you or your property would qualify:

USDA Guaranteed Rural Housing

STEP 1: See if property is eligible. (the program is geographically driven)

  • Go to http://eligibility.sc.egov.usda.gov
  • Click on “Single Family Housing” under the “Property Eligibility” category
  • Read the short Property Eligibility Disclaimer and click “Accept”
  • Type in the property address and click “Get Map”
  • It will respond with “This address IS eligible” or “This address is not located in an eligible area.”

Another GREAT feature USDA is one of the few programs that allows loan amounts to be based on the appraised value.  You can use upto $10,000 for repairs/or closing costs.

Example:

Sales Price: $275,000

Appraised Value: $280,000

Difference between sales price ($275,000) and appraised value ($280,000) = $5,000 can be used for repairs/or buyer’s settlement costs (cost for doing the loan and prepaid items such as 1 year homeowners insurance and prorated property taxes). . . Pretty cool !

BUT the eligible areas may be changing after their fiscal year is up – September 30th – so as long as you are in contract by September 30th, USDA has said that as long as a fully executed loan application gets submitted to them by September 30th – they will honor old areas that may have been removed after September 30th. . .so the clock is ticking.

Contact your Directors Mortgage Loan Specialist for more details and to get your loan started for pre-approved. . .

Thank you for taking the time to read my blog.

Have a blessed day!

Information deemed reliable but subject to change without notice. Qualified borrowers only, subject to credit approval.  This is not a commitment to lend.  Consumer Loan License NMLS-3240, CL-3240.