USDA Mortgage Loans
A USDA home loan is a great deal for borrowers who want to live in a rural area. Like other government loans, these are great deals especially for single-family homes. Although the home can have more land, it cannot be mainly an income property.
For example, it can have space for a large garden and chickens, but not be a commercial farm.
USDA Income Limits
Compared to other types of home loans, the USDA limits how much money you can make. It depends on the location, and you can see the income limits here. Similar to other government loans like FHA, these loans have the purpose to get borrowers into homes, not build their property portfolio.
USDA Loan Down Payment
You can get into a USDA loan with zero down!
No Private Mortgage Insurance
Even with zero down, USDA loans don’t have private mortgage insurance. But, they do have something called an annual guarantee fee. The good thing is that the fee is less than PMI.
Although you can’t make too much money, your income still has to cover your bills and mortgage payment comfortably.
The maximum DTI for most USDA loans is 41%. Here’s an example of a 33.3% DTI.
- Total monthly debts – $2,000
- Gross monthly income – $6,000
The calculation would be $2,000 divided by $6,000 = 33.3%.
If you receive child support, you may be able to count it in your income. Check with your loan advisor.
USDA Loan Alternative
If you’re shopping in a rural area, check out USDA loans first. Otherwise, FHA and conventional are the other choices unless you’re eligible for a VA loan.
Homestead is a top lender of USDA home loans for purchasing and refinancing. Our rates are some of the lowest in the states we serve. Our loan advisors provide excellent service, as you can tell from our reviews. Plus, we close fast!
What they say about us.
Kelley J. says…
"They were always available and had everything ready well before the closing date. It was a pleasure doing business with them."
Amy K. says…
I’ve worked with Homestead Financial Mortgage on a new home purchase, as well as our more recent mortgage refinance. Jayson Hardie and the rest of the team were amazing throughout the whole process! They ran my numbers and made suggestions on the best possible rate and program for my situation. Homestead Financial Mortgage is definitely a lender you can trust. Highly recommend!!!
Bradley H. says…
Alicia handled our needs above and beyond our expectations. The entire process, form first contact to our closing. was completed in less than 30 days, thank you, Alicia! I am a business owner and always struggled with Processors understanding the income flow of a business owner, Alicia completely understood and knew exactly how to proceed correctly without delay or frustration. I highly recommend Alicia to anyone going through the purchase of a home.
Wouldn't send my business any where else!! Cari is amazing at what she does! You are not just another number here, you are cared for and treated like family!