USDA Rural Development loans offer a no down payment home purchase option for buyers that live in less populated census tracts.
While these loans can be restrictive in terms of income and geographic location, this is an incredible opportunity for eligible borrowers purchasing eligible homes with no down payment required.
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USDA Home Loan | Borrower Requirements
- Owner Occupied only – borrower must live in the home as a primary residence
- Minimum 640 Credit Score
- Full income / asset documentation only – W2 and/or tax returns
- Income limits – Must meet Rural Development Moderate Income Limits – View Income Limits
- Up to 103.5% Loan to Value – includes financing of Guarantee fee
- No minimum borrower contribution required – 100% down payment can be gift
- Maximum 46.99% front end, 56.99 back end debt to income ratio with automated underwriting approval
USDA Home Loan | Loan Terms
- 30 Year Fixed Only
- 3.5% Guarantee fee can be financed into loan
- .40% annual mortgage insurance fee (paid monthly)
USDA Home Loan | Property Requirements
In order for a property to be eligible for a USDA Rural Development guaranteed loan, the property must be located in a rural designated area as defined in Rural Development Instruction §1980.312.
You may view eligible areas on USDA Rural Development’s web-site at: http://eligibility.sc.egov.usda.gov
- Property must be a non-farm, non-income providing tract.
- According to Rural Development Instruction §1980.313 (e) “Generally, the value of the site must not exceed 30 percent of the total value of the property. When the value of the site is typical for the area, as evidenced by the appraisal, and the site cannot be subdivided into two or more sites, the 30 percent limitation may be exceeded.”
- Single family residence only.
USDA Home Loan | Loan Limits
USDA Home Loan | Waiting Periods after Credit Hardship
- 3 Years from Discharge of Bankruptcy under Chapter 7
- 3 Year from Discharge of Bankruptcy under Chapter 13
- 3 Years from Foreclosure, Short Sale or Deed in Lieu of Foreclosure
Get Pre-Approved for a USDA Loan
Get started with the Pre-Approval process by completing the short form that best describes your goals below.