USDA Loan Program – Property eligibility / Buyer eligibility / Sales Price Limits
A USDA Guaranteed Loan is Government insured 100% purchase loan. These Loans are only offered in rural areas. Under the terms of the program, an individual or family may borrow up to 100% of the appraised value of the home, which eliminates the need for a down payment.
To be eligible, applicants must:
- Have an adequate and dependable income.
- Be a U.S. citizen, qualified alien, or be legally admitted to the United States for permanent residence.
- Have an adjusted annual household income that does not exceed the moderate income limit established for the area. A family’s income includes the total gross income of the applicant, co-applicant and any other adults in the household. Applicants may be eligible to make certain adjustments to gross income— such as annual child care expenses and $480 for each minor child—in order to qualify. SEE INCOME GUIDELINES ATTACHED
Have a credit history that indicates a reasonable willingness to meet obligations as they become due.
- Have repayment ability based on the following ratios: Principle, Interest, Taxes, and Insurance (PITI) divided by gross monthly income must be equal to or less than 29 percent.
- Total debt divided by gross monthly income must be equal to, or less than, 41 percent.
Homes That Qualify:
- Guaranteed loans can be made on either new or existing homes.
- Existing homes must be structurally sound, functionally adequate, and in good repair.
- There are no restrictions on the size or design of the home financed.
- The home must not be used for income-producing purposes.
- Homes must be located in rural areas. Rural areas include open country and places with a population of 10,000 or less and—under certain conditions—towns and cities with between 10,000 and 25,000 residents. SEE WEB ADDRESS BELOW.
You can check a home’s eligibility by typing in the address of the following website. http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp&NavKey=property@11. Just hit the accept button, type in the address and hit the “GET MAP” button.
I have attached the income and sale price limits for California.
REMEMBER THAT USDA HAS BOTH SALES PRICE LIMITS AND INCOME LIMITS. MAKE SURE YOU CONSIDER THESE LIMITS WHEN RECOMMENDING THE USDA LOAN PROGRAM TO A POTENTIAL BUYER. USDA ONLY LENDS ON HOUSES WITHIN THE USDA AREAS. PLEASE MAKE SURE THE HOME IS LOCATED IN A USDA AREA. YOU CAN USE THE WEB ADDRESS ABOVE TO VERIFY IF THE PROPERTY IS ELIGIBLE.
If you have any questions, please contact me at the contact information below.
James T. Camara
Sr. Loan Officer
Ph (209) 981-5626
Fax (209) 249-5280
jcamara@scenicoaks.net
Ca Dept of Real Estate License #01774620 NMLS #257972
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