The USDA or the United States Department of Agriculture backed loans have two primary requirements for eligibility – the borrowers’ credit and financial eligibility and the property eligibility. Like with all typical home mortgage plans, you should demonstrate your willingness and even ability to take care of your loan promptly. Lenders will also check your credit history to determine your ability to make your monthly mortgage payments in time. On top of that, you should also be able to show that you have a steady income that’s enough to take care of your monthly loan payments as well as taking care of your other expenses each month.
Process of Evaluating Income for USDA- Backed Loans
Since the USDA home mortgage is a guaranteed program that is made to help families with low to very low income, the US Department of Agriculture needs to put some restrictions depending on the rural area that the borrower wishes to buy a house.
Your loan underwriter will take a look at your monthly and yearly gross income to know if your income is eligible for a USDA loan. Other factors that need to be checked are the gross revenues of the co-applicants if any, and also the other adults who would also be living in the same property. If your generated income goes past the maximum mark, you still have an opportunity to make some adjustments that will help you qualify for a USDA mortgage.
Do you have a steady source of income? Have you been working with the same employer for several years? Having a stable job and source of revenue can help speed through the whole underwriting process.
But what if you’ve had several jobs for the past few years? Or what if you’re self- employed?
To provide a loan underwriter with a better picture of your financial status, you should submit copies of your IRS tax filings for the past two years. If you are considered to be self- employed, then you need to provide at least three years of tax returns to determine if you have an ideal average gross income. However, if you are currently working for a client or an employer, then you should submit copies of your most recent pay stubs for the past two months.
These are just some of the factors that will help get your USDA loan application approved. There are still other options that you can consider if you don’t have any means to save up for your mortgage’s down payment. It’s always be best to consult certified brokers to get the best loan for your needs.
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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.