If you are looking for a no-downpayment mortgage for the house that you have been dreaming of, taking out a USDA loan may be for you. This kind of loan is tailor-fit for those who cannot apply for the traditional mortgage and those who are not financially well off.
USDA loans are for properties that are in the rural and suburban areas. These are homes that you can’t find in high rise buildings and highly urbanized areas. USDA loans are not automatically like what you can imagine the little house on the prairie would be as condominium units can also be bought using this loan from the U.S. Dept. of Agriculture. If you are aiming for a condo or a mid-rise housing complex, it must be located in a USDA approved location and found on the list of condos approved by the FHA, Freddie Mac, Fannie Mae, or the Dept. of Veterans Affairs.
What you need to know to qualify
To qualify for the home mortgage offered by the USDA, you must be an American citizen with a dependable income. If you have other debts you need to settle, debt repayment must not be more than 41% of what you are currently earning. But if you have a score higher than 680, the USDA may be able to give you some higher debt repayment ratio. For the current minimum requirements, talk to our loan officer and ask for the updated numbers as the COVID-19 pandemic affected all the mortgage rates and requirements.
You need to also be aware that they will be looking at your credit history for the past year. The rule of thumb when it comes to credit scores is that the higher the number, the easier and faster your process will be. The lower your score, the more questions you might have to answer.
Do not think that since the loan is offered by the USDA, only farmers and ranchers can avail of this kind of loan. What you do for a living doesn’t matter as qualifying for the loan is all about your income and the location of the property you want to get. Let us help you walk through the process and ask us how you can start owning your dream home.