Qualifications for USDA Loan
USDA Loan Geographic Eligibility
The first and probably the most important eligibility requirement for USDA loan is that the applicant must live in a small town. Typically towns with a population of less than 20000 are eligible. However, one cannot buy a farm with USDA funds nor can the applicant use the mortgage to buy a second home. The main purpose of this loan was to boost up rural population and that is why USDA has been pretty clear about the geographical location of the houses for which the loan is being applied for. From October 1 2014, there has been a change in the USDA zone loan areas that are supposed to be within the guidelines for lower-income qualifications.
Financial Requirements for a USDA Loan
Mortgage under the USDA are available to families as well as individuals whose income does not exceed 80 percent of the median income level of the county. Other financial eligibility criteria for a USDA loan are:
- Credit score – The credit score of 640 or higher is usually required. However, exceptions are usually made for those within thin files
- Debt to income – The PITI that stands for interest, taxes as well as insurance must be less that 29% of your income and all the monthly debt should not be more than 41% of your income.
- Overall income – The income requirement of the USDA usually depends on the state, county as well as family size. However, there are adjustments as well as flexibilities for dependents, disabilities and so forth. Moreover, the applicant must be 18 or older and should be a citizen of the US or, qualified alien or a national.
Find Out if You Qualify
Find out whether you are eligible for this loan and email us or speak with one of our USDA Loan experts today at 877-342-7449.