What are the requirements for the USDA program in Mount Vernon? So that’s going to be looking at a 640 minimum credit score requirement.
There is a income requirement too when applying for a USDA Loan Mount Vernon.
So basically the income requirement is about 78,000 if you’re in a family of 1 to 4 if you’re in a family of 5+ that’s gonna go up to about $103,000 on the income limit.
The big requirement for USDA is that it’s property specific.
It’s got to be in a USDA Approved Zone. How much down payment does this program require?
It’s actually 0% down payment which is Great!
Ok Awesome, and how much does the average home buyer come in with out-of-pocket?
So because your down payment for a USDA Loan in Mount Vernon is covered you’re just gonna have to come in with again your prepaid and closing cost So if it was a $300,000 purchase.
you’d be looking at about $7,500 cash for keys to get in the home.
What type of home buyer is the USDA Loan program Ideal for? So this is going to be ideal for the home buyer that’s looking for a property in those specific areas.
Ideally it’s properties that are going to be USDA Eligible rural zones.
So not right in the middle of the city, but maybe if it’s more on the outskirts, on a little bit of land, lower tax rate areas that’s probably going to be a property that’s eligible and that would be ideal because that one would probably qualify OK, Fantastic.
What is a USDA Home Loan?
I bet you’re wondering, what is a USDA home loan?
Designed with the residents of more rural areas in mind, the United States Department of Agriculture designed its loan program to enrich rural communities by providing affordable home loan options to low-income households that may not be able to secure home financing through other means.
Who has time to stop and smell the roses? You don’t, and this isn’t even a rose.
What are the requirements for the USDA program?
So USDA has a few interesting requirements First of all, you’ll need to have at least a 580 credit score Some lenders require a 620 credit score.
Your household income has to be under the county maximum Like a lot of down payment assistance programs. This is based on family size So 1 to 4 is one category and then 5 and above is a higher threshold for qualifying
What’s unique about this one is the home has to be within a designated area.
So, Typically what that means is.
NOT within a metropolitan area So within our area here (Riverside county) Our local cities around her don’t qualify But we only need to go 10 miles away to where there’s an open area where there’s Several homes that qualify.
USDA stands for United States Dept of Agriculture But it’s NOT a farm loan.
Specifically, they don’t finance this program for farms in Mount Vernon.
It has to be a Single Family home in the Mount Vernon area, without a barn structure on the property.
Then it also has some home price limitations.
The Threshold is a little bit lower than say an FHA loan for the loan limits.
Ok, and how does this program differ from other Down payment programs?
So it’s different because it’s not really a down payment program but it allows financing up to a 100% of the purchase price And it’s interesting because you can actually use this program with 1 or 2 of the other programs.
If you need closing cost assistance But, what’s unique it’s a 100% Financing so you don’t need a 2nd or a 3rd lien on the property.
Your interest rates are typically lower than if you combine it with a down payment assistance programs and you don’t have to repay any down payment assistance.
It has a monthly factor It’s like mortgage insurance upfront It’s financed at a monthly component.
Much less than FHA So if you can qualify for this program It’s better than FHA And As I mentioned, rates and payments Are typically lower on this program So USDA is really a great program.
And on average How much does the home buyer have to come in with out-of-pocket?
So Again, we are financing the whole loan Purchase price up to 100% So the only thing remaining is then the closing costs Typically, plan on around 3% of the purchase price for funds to close.
The question there then becomes, Well, Where does that come from? Typically, we ask the seller to cover those costs And if we can get the seller to cover 3% Then, the buyer may only need to come in with an earnest money deposit.
And they may even get most or all of that back.
If the seller is covering all the fees.
One unique feature about USDA Versus all other loans is that if the home appraises for more than the purchase price.
We can finance the closing costs up to that appraised amount So, no other loan I know that we can actually finance the closing costs.
What type of home buyer is this program ideal for?
So certainly those that don’t have access to money for a down payment Anyone that wants to live that doesn’t have to live within a metropolitan area because, again, the house has to be in an area that is not in a high densely populated area.
It’s also suited well for people who have some credit issues and anybody that qualifies for this program would definitely be better served than going FHA so those type of people.
And besides the Area restrictions are their any other property restrictions? So property restrictions are going to be similar to FHA They’ll do manufactured homes.
They’ll do homes with Casitas So no real other restrictions.
Just if it conforms to the FHA guides then it should qualify for USDA There’s a couple little quirky things that you don’t run into very often like you can’t actually have a barn on the property It definitely can’t be for agricultural purposes It has to be for residential purposes.
USDA Loans in Mount Vernon – Do You Pre-Qualify?
- Hi my name is David Young and I'm the Directorof Business Development at RCN Capital.
I'm the person that runs ourCorrespondent Lending Program.
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RCN is very active in the hard money space with non-owner occupiedresidential real estate.
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We have three product lines essentially based on term length.
There's a 12 month term product, there's a two plus one, twoyear with a one year option, and there's a 30-yearfixed rental program.
All of those are availableunder a white label umbrella through our correspondentlending platform.
Correspondent lending programis available nationwide.
Anyone can go to rcncapital.
Scroll down towards the bottom and you'll see a map of the United States showing that we're lendingin almost every state.
RCN seeks to partner witha variety of entities out there operating inthe private lending space.
Generally we connectwith other hard money, private money lenders thatare active in the same space and are looking to expandtheir business in scale, as I mentioned earlier, maybe a need to scalegeographically or with more capital or the other items thatI mentioned as well.
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Your Local Mortgage Lender | Total Mortgage Minute
Hi, everyone! Melanie Cameron herewith The Cameron Team, Coldwell Banker Sea Coast Advantage in Wilmington, NorthCarolina.
Had an important topic that I wanted to bring to everyone's attentionthat is as a deadline coming up really fast.
A lot of buyers in this area likethe USDA 100% financing program, and what that is is a programthat allows for homes that are in certain areas to be eligible for 100%financing.
Those maps are getting redrawn, as effective June 4th.
A lot of the mapsin our area that were previously eligible for the 100%financing will no longer be eligible for the 100% financing.
Stillgot a little bit of time to take advantage of it, like again, the mapschange on June 4th, which is little less than two weeks away.
There are somecriteria that have to be met in order to to still get that in the areas that aregoing to no longer be eligible after June 4th.
You have to have a signedcontract, ratified contract, by both parties dated before June 4th.
You have to have your loan application turned in with the property address onthe property turned in before June 4th and the loan estimate has to be issuedby the lender within 3 days of the application date.
So, a couple of things.
Obviously, the buyer would still need to make all the other necessaryqualifications for the USDA loan, but a lots going on.
So, if you're consideringor on the fence about looking at a home that's in the USDA eligible area, thatmight not be in the USDA eligible area in a couple weeks, might want to go aheadand make a decision.
If you have any questions about that, give us a call.
Youcan reach us at 910-202-2546.
Check us out at TheCameronTeam.
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