USDA Home Loans
USDA Rural Home Loans are government backed home mortgages that allow for zero down payment on homes that are in a USDA designated rural community. These loans are designed for families with moderate to low incomes you are having a hard time securing a home loan in this tough economy. USDA home loans have some of the most flexible qualifying guidelines out of any loan program in America, as well as low closing costs, and 100% financing. However, because these loans are designed for low to moderate income families, there are USDA income limitations in place that vary from county to county.
USDA Home Loan Income Limitations
Income limits vary county to county, depending on the average median income for the area. Income limits are determined by the applicant’s entire household income, not just the primary borrower or borrowers on the mortgage. Income limit is also separate from USDA debt-to-income ratio limits, which can’t be more than 41% of your total income. To qualify for a USDA mortgage, your total household income must not exceed 115% of the average median income for your area. This means if your total household income is above this 115% threshold, you will not qualify for a USDA loan.
Eligible Deductions of USDA Loans
If your total household income exceeds the USDA loan limit for your specified area, you may still be eligible for some moderate deductions that can help you to qualify. Here is a list of eligible deductions for a USDA home loan.
1. $480 deduction for each child under 18
2. $480 deduction for disabled dependents 18 years old or older
3. Other verified childcare expenses
4. $480 deduction for any full time student living in the home 18 years or older
5. A deduction for the care of children 12 years or younger, to the extent necessary to allow a member of the family to be gainfully employed
6. $400 deduction for any eligible elderly family member
7. Other deductions may be considered including medical expenses for elderly family, reasonable attendant care, and auxiliary apparatus expenditures for dependent family member.
For more information on whether you qualify for a USDA Rural Home Loan please contact your local USDA field office to see if you are eligible for a USDA home loan.