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USDA Government 100%
Rural Developement  Financing  



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100% Financing
Guaranteed USDA Rural Housing Loan Program

Learn About FHA Mortgages

Credit History and Lending Criteria

Sometimes good credit and a steady income are not enough to qualify for a home loan at a commercial lending institution, such as a bank, or savings and loan company. More rural families and individuals may be eligible to become homeowners with the help of a USDA guaranteed home loan. When the federal government agrees to guarantee a loan, lending institutions can help buyers while incurring less risk. Through USDA's Guaranteed Rural Housing Loan Program, people can qualify for mortgages, even without a down payment.

  • No minimum credit scores – limited credit usage is not consider as negative
  • Cannot be delinquent on a federal government debt
Applicants with a 620 credit score or higher have many advantages. Applicants with less than a 620 credit score will have the following items considered for loan approval: more than one 30 day late payment in the past 12 months, debt written off in the past 36 months, collections opened in the past 12 months or older ones that are still open, and acceptable mitigating circumstances may offset certain adverse credit issues.

 

Quick Facts

  • Provide modest housing for moderate income families in non urban areas
  • Low one time Guarantee Fee of 3.5% for purchases and .5% for refinances
  • Up to 103.5% (with Guarantee Fee) financing based on appraised value versus purchase price
  • Seller contributions and third party gifts allowable
  • No statutory maximum lending limits
  • No Monthly Mortgage Insurance (PMI)
  • Not restricted to first time home owners
  • Loan funds on a purchase can be used for repairs, the guarantee fee, and most lender fees

     

Property Requirements
  • You can input a property address to check Property Eligibility
  • Primary residence only, no rentals or income producing properties
  • New or existing stick built, modulars, and condos / PUD
  • Manufactured units must be new with the dealer approved by RD
  • Well and septic inspection for private systems
  • Conventional type appraisal
  • Properties with in-ground swimming pools are not acceptable
  • No set lot size limit
  • The site value should not exceed 30% of the total appraised value (exceptions possible)
Income and Ratios
  • Income is projected forward including projected pay raises
  • Verification of employment and current paystub or acceptable alternative documentation
  • Self-employed, two years tax returns and current P&L statement
  • Non-taxable income such as child support or social security can be grossed up by 125%

     


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