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USDA Home Loan Qualifications to Remember
Buying a home is not an easy task. And the only way for anyone to get a house is by applying for a mortgage. But what if your paycheck is not enough to meet the requirements? Good thing there's the USDA Rural Development Program to help you with your mortgage dilemmas.
The USDA Rural Development Program aims to assist eligible borrowers get a home mortgage in select rural areas across the country. It's a program that helps low-income borrowers qualify for a mortgage which they wouldn't normally be eligible. It's a great alternative for borrower's who can't afford to get a loan. What makes it even better is that it offers 100 percent financing on the borrower's mortgage. But what are the things that would help you qualify for it?
Only those who are either a legitimate U.S. citizen or someone who has the documents to prove their permanent residency are qualified to get a USDA home mortgage assistance.
Although the USDA Rural Development Program doesn't require any down payment, you still need to have enough funds to pay your home loan payments on time. Keep in mind that there are other things that are included in your monthly payment such as interest, principal, insurance, and taxes that you need to pay as well. It's much advisable to save at least 29 percent from your monthly income to pay your monthly mortgage payments. You also have to save some funds on your expenses and other debts every month.
Your loan underwriter will also check your source of income if it's enough to maintain your financial responsibility. You will be asked to provide any proof or documentation that would reflect your income for the past 24 months. For self-employed applicants, you need to provide any documentations or income tax returns that would show your income for the past 2 years.
Just like the other loans, your loan underwriter will also check your credit history. You have to make sure that your credit score is above 640. Anything lower than the score required by the USDA will no longer be approved.
The borrower should agree that the household will occupy the property and consider it as their primary residence in rural areas that are eligible for a USDA loan. Qualified applicants are also allowed to either build, improve, renovate, or relocate a property in eligible rural areas.
The borrower should not have been debarred or suspended from participating in federal assisted programs.
He or she should also be able to demonstrate willingness to pay his or her credit obligations on time.