What are Alabama USDA Loans?
USDA offers two tpyes of USDA home loans in the state of Alabama: Direct and Guaranteed. Most borrowers choose the guaranteed option because there are less restrictions. The guaranteed is through a private lender and where the USDA backs the loan and enforces guidelines.
USDA Guaranteed Home Mortgage Loans are the most common type of USDA Loan in Alabama and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. Area income limits for this program can be viewed on USDA's website. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate.
USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available to low and very low income households, as defined by the USDA. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI.
What are the requirements for a Alabama USDA Home Loans ?
Many things determine if someone is eligible. The first is credit score. For most lenders the minimum credit score is 640. Borrowers are required to be 2 years removed from bankruptcy and 3 years from foreclosure. Also, USDA Loans now require at least 3 tradelines with a 12-month history but alternative credit can be used in lieu.
What is the maximum amount that can be borrowed?
USDA Loans actually do not have a maximum loan amount. The debt to income ratio will determine the max loan amount on each loan because the borrowers will be limited on loan amount by their ratios. The max ratios are 29% and 41%. Additionally, your total household monthly income must be within USDA's allowed maximum income limits for your area. Maximum USDA Guaranteed Loan income limits for your area can be found at www.usda.gov.
Closing costs vary, but borrwers can have the seller pay up to 6% of the sales price towards their closing cost. In most cases this is more than enough to cover all closing costs.<< Back to the list.
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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.