The borrower cannot currently own a home and must have insufficient resources to qualify for a conventional home mortgage.
Borrowers need to have a credit score of at least 620 and possibly lower due to not having credit history. Credit history must indicate a reasonable ability and willingness to meet obligations as they become due.
GRACE PERIOD AFTER A FORECLOSURE
If you have had a foreclosure, you will need to wait a minimum of three years to qualify for a USDA Loan. In addition, your name needs to be removed from the CAVIRS database in order to become eligible.
The property most be located within an eligible low density area.
INCOME CAP AND REQUIREMENTS
There are maximum income requirements that vary by state and county, and by family size. Typically, adjustments are made for disabilities, dependents and so forth. A borrower can't have income that exceeds 115% of the median county income. Look up Income Limit by county.
NO DOWN PAYMENT
100 percent financing available with no down payment required. Eligible repairs and closing costs may be included in the loan up to the appraised value of the property.
The maximum loan amount is 100 percent of the appraised value plus the upfront guarantee fee. The total amount a person can borrow depends on a number of factors, including: Value of Home; Monthly Income; and Debt to Income Ratio.
ANNUAL FEE PAID MONTHLY
The current annual fee is 50 percent. The calculation is based on the average annual scheduled unpaid principal balance for the life of the loan. The fee is calculated when the loan is made and every 12 months thereafter until the loan is paid.
UPFRONT MORTGAGE INSURANCE
Effective 10/2015 the upfront guarantee fee may be included in the loan amount above the appraised value and it's currently set at 2.75 percent.
Housing must be modest in size, design, and cost. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. New Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards. Existing manufactured housing will not be guaranteed unless it is already financed with an HCFP direct or guaranteed loan or it is Real Estate Owned (REO) formerly secured by an HCFP direct or guaranteed loan.
The individuals obtaining the loan must also have the intent to occupy the single family home.