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Arkansas Home Loan
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What is an Alabama USDA loan?

An Alabama USDA loan is a home loan that is backed by the United States Department of Agriculture. The loan is designed for residents in Alabama and across the U.S. that are low to moderate-income and live or plan to live in a rural area

What are the benefits of the USDA home loan?

There are several benefits to the USDA loan that Alabama homebuyers should be aware of. The primary benefit of the USDA loan is that it offers a 100% no money down feature. The USDA loan is the only nonveteran loan that offers no money down. Additionally, the USDA home loan offers flexible credit features for home buyers.

Do I have to be an Alabama first time home buyer to utilize the USDA rural development loan?

No, you do not have to be a first-time homebuyer to obtain a USDA rural development loan. While homebuyers do not have to be first-time homebuyers there is a catch for move-up buyers. If someone currently has a home they must sell that home before closing on their new home with the USDA loan. The USDA rural development loan does not allow individuals to own two homes at the same time in most cases.

What is the difference between the Alabama USDA guaranteed loan and the Alabama USDA direct loan?

The USDA guaranteed loan is the most common type of USDA home loan. This is when a homebuyer works with a private mortgage lender or bank to obtain the USDA loan. The mortgage lender lends the money but the USDA guarantees or backs the loan. The USDA still makes the underwriting rules for this loan product. The USDA direct home loan is when a homebuyer works directly with their local USDA office to obtain a USDA loan.

Does the USDA loan Alabama allow homes with excess land or acreage?

The USDA loan Alabama does not have a maximum amount of acreage requirement. While there is not a rule on the amount of acreage a home can have homebuyers still must be cautious for two main reasons. One reason is that if the land starts to hold more value than the home in a transaction it's viewed more as a land loan that does not fall under this program. The rule of thumb is that the value of the land should not exceed 30% of the total value of the transaction. The second area of concern with excess acreage is finding comparable sales. It's harder to find the needed comps when there is additional land.

What credit score do I need for an Alabama rural development home loan?

The Alabama rural development home loan does not have a minimum credit score. This is left up to the lender to decide what their score requirements are. Most lenders set their credit scores at 620-660

How do I determine if an Alabama property is USDA eligible?

Determining an Alabama property's eligibility is very easy. Homebuyers just need to go to the USDA eligibility map and search by specific address. If they do not have a specific address, they can use the map to search general areas. The map is very user friendly and very self-explanatory.

Can I buy a foreclosed home with a rural development home loan?

Yes, foreclosed homes are eligible for the rural development home loan. The thing that homebuyers should pay attention to when looking at a foreclosed home for purchase is the condition of the property. It’s not uncommon for homes that have gone through foreclosure to have damage and the rural development home loan will require all repairs to be made before closing.

Is there an application fee for the Alabama USDA loan?

It will depend on the individual lender however most lenders do not require an application fee.

Texas USDA Home Loans with 100% Financing

Are the interest rates higher for the USDA mortgage?

The USDA mortgage rates are usually about the same as FHA and VA mortgage rates. Mortgage rates will vary from lender to lender. The competitive environment of mortgage lending usually keeps most mortgage lenders very similar on the rate.

Can I put money down on an Alabama USDA home loan?

Homebuyers are not required to put money down on the Alabama USDA loan but may do so. The benefit of putting money down is that it will lower the amount financed and in turn lower the monthly payments.

Can the home I want to purchase with the USDA home loan have a swimming pool?

Yes, swimming pools are allowed with the USDA home loan. They must be functioning and in working order. They cannot have any damage or safety issues.

What does maximum household income mean with the USDA mortgage?

The USDA mortgage has a unique requirement that most other home loan programs do not have. Since the program by definition is for low to moderate-income families in rural areas the USDA confirms the household income to ensure that it is not over 115% of the median income of a given area. This will vary from county to county and state to state. For example, if the median income is $68,000 then 115% of this is $71,300.

What the maximum sales price for a USDA home loan in Alabama?

The USDA home loan in Alabama does not have a maximum sales price. If a home buyer can meet the debt-to-income ratio requirements and the household income requirements they can purchase at any price point.

Can I get a USDA home mortgage if I have had a previous foreclosure?

Yes, homebuyers that have had a previous foreclosure are eligible after they are three years removed.

Is the seller allowed to closing costs for me on an Alabama USDA home loan?

Yes, the seller can pay up to 6% of the sales price towards the buyers closing costs. For example, on a transaction where the sales price is $105,000 the seller can pay up to $6,300 towards the buyers closing costs. In most cases, this will be enough to cover everything.

Does the Alabama USDA loan have mortgage insurance?

The Alabama USDA home loan does not have mortgage insurance but does have what’s called a guarantee fee. There is a 1% upfront guarantee fee that is added to the total loan amount and a yearly guarantee fee that is paid out monthly. These fees are how the program is funded.

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Arkansas Home Mortgages

Primary Residential Mortgage, Inc.
10121 N Rodney Parham, Suites C & D
Little Rock, AR 72227
NMLS # 3094
Branch NMLS # 252910
Licensed by Arkansas Securities Department 11558
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Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.