U.S. Department of Agriculture Rural Development homeownership program

I KONNECT The American Dream Homeownership

USDA Home Loans are issued by qualified lenders and guaranteed by the United States Department of Agriculture (USDA). Favorable to those living in rural or low-income areas. USDA Loans offer $0 money down, lenient eligibility requirements and competitive interest rates - due to the loan being guaranteed by the USDA. Stand alone as the only mainstream zero money down program available to borrowers that have not served in the military.

Also known as the Section 502 Direct Loan Program, this program assists low- and very- low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.

What is the minimum credit score for USDA? 640 credit score you'll need to qualify for automatic approval through the USDA's automated loan underwriting system. Stable and dependable income. A willingness to repay the mortgage - generally 12 months of no late payments or collections.

What is the designated rural area? The property must be: Located in a rural area (generally defined as a region outside of a major city with fewer than 35,000 residents. Used as a primary residence only, not for income-generating. Less than 2,000 square feet in size (typically).Interest rate and payback period? Effective March 1, 2022, the current interest rate for Single Family Housing Direct home loans is 2.50% for low-income and very low-income borrowers. Fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower. Interest rate when modified by payment assistance, can be as low as 1% Up to 33 year payback period - 38 year payback period for very low income applicants who can’t afford he 33 year loan term.

What area are rural ? A population of no more than 2,500 people. A population between 2,500 and 10,000 if it's rural in character. A population between 10,000 and 20,000 but isn't part of a metropolitan statistical area (MSA) and doesn't offer mortgage programs for low- to moderate-income families. Located in a rural area (generally defined as a region outside of a major city with fewer than 35,000 residents) Used as a primary residence only, not for income-generating endeavors. Less than 2,000 square feet in size (typically)

Geographic restrictions. Mortgage insurance included (may be financed into loan) Income limits. Single family, owner occupied only - no duplex homes.

What is the income limit in Florida? USDA eligibility for 2022:1–4 member household requires annual household income to not exceed $91,900 in most areas of the country, and annual household income for a 5–8 member household to not exceed $121,300 for most areas.

Can I get a USDA loan with a 500 credit score? Yes, with lower scores if you have compensating factors.

Can you build a house with a USDA loan? A USDA construction loan can finance the land, build your home, and serve as your long–term mortgage – essentially rolling three loans into one. Plus, there's no down payment required and only one set of closing costs.

Pros: New and existing properties, No do penalty, finance closing cost, flexible credit guidelines, lower fixed interest rate.

Cons: Geographical restrictions, Income limits, Private mortgage insurance is included and Single family home only, no duplexes.

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