USDA Home Loans



USDA Home Loans allows 100% financing for a home purchase, or refinancing in a USDA designated rural area. These home loans are guaranteed by the United States Department of Agriculture and must meet guideline requirements. Home loan eligibility is based primarily on income and the property you are choosing to purchase.

USDA Guidelines:

  • Purchase or streamline refinance is available
  • Income limitations - All working family household members’ income must be included for eligibility including non-purchasing spouse income
  • Applicants for loans may have an income of up to 115% of the median income for the area.
  • Evaluating borrower income eligibility can be viewed on the USDA website,  Section 4.2, Page 1
  • Property must be in a location designated as a USDA Rural Development housing area
  • Maximum 6% seller concessions are allowed
  • Minimum 640 credit score is required, eligibility can be found on the USDA website,Section 4.12, page 47
  • Maximum debt-to-income, or DTI allowed is 46.9%
  • IF the house appraises for more than the purchase price, closing cost may be financed into the loan
  • The Guarantee Fee of 2% and the MI of .4% may also be financed depending on appraised value
  • 30 year loan term is only term allowed
  • Non-occupant co-borrowers are not allowed on USDA loans
  • Delinquent Federal Debts are not allowed
  • Installment debts must have six payments or less remaining to exclude from DTI
  • Deferred debt must show “Deferred” for 12 months from 1st payment date to exclude from DTI
  • Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance
  • Applicants must agree to personally occupy the dwelling on a permanent basis.

Streamline Refinance additional guidelines:

  • It is a requirement that the loan being refinanced must be a current USDA loan.
  • The property being refinanced does NOT need to be located in an eligible rural area as property eligibility may change from time-to-time.
  • Borrowers on the current USDA loan may be removed or added to the new loan as long as there is one original borrower remaining.
  • A credit report is required
  • The new loan amount may include the principal balance of the loan and the one time up-front guarantee fee.
  • A new appraisal is NOT required.
  • Cash out is NOT allowed

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