USDA 100% Financing Mortgage Loan
USDA Loans vs Other Loans
USDA mortgages have a number of differences from other type of loans, including other government loans. For example, they are always fixed rate loans. The program does not offer any adjustable-rate mortgages. There are few requirements regarding the house itself as long as it is located within one of the qualifying Rural Development areas. The main limitation on the home is that it must be a single-family home.
As far as requirements go, it’s often easier to get a USDA loan because they do not require as high of a credit score—the minimum is 580. They may also require less income. The minimum income needed to qualify for a USDA loan does vary by location, plus that limit increases if more than four people will be living in the house. Generally, the income to debt ratio will be between 29% and 41%. Those who have more debt may still be able to get a USDA loan by submitting an income ratio waiver or if their credit score is higher than 660.
Why Apply for a USDA Loan?
In addition to the lower required credit score, there are a few other reasons why a person may want to apply for a USDA loan. One of the biggest reasons is that it’s possible to get 100% financing through USDA. There is no down payment required for those who qualify. The only other type of mortgage that offers this is a VA loan.
Here are some of the other benefits to a USDA loan:
- All of the closing costs may be received as a gift.
- The sellers may pay as much as 6% of the closing costs.
- The closing costs and even renovation funds can be included in the loan.
*The down payment associated with this offer is from the borrower’s funds (the borrower’s funds must be sourced and can include gift funds or funds from approved Down Payment Assistance program). The down payment cannot be from the lender credit or a seller credit. Restrictions apply, consult your Personal Mortgage Advisor for details.
All home lending products are subject to credit and property approval. Rates, program terms and conditions are subject to change without notice. Corporate NMLS Unique Identifier # 32416. Verify a mortgage company or individual license on the Nationwide Mortgage Licensing System Consumer Access site: www.nmlsconsumeraccess.org. The interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes: and the consumer should consult a tax advisor for further information regarding the deductibility of interest and charges. U.S. Dept. of Housing & Urban Development Mortgagee-FHA Lender ID # 23773-0000-0, 23773-00017 (Unconditional Direct Endorsement Approved), USDA SFHGLP Approved, Department of Veterans Affairs VA Automatic Lender 56997-00-00. Nations Lending Corporation®