USDA Loans

USDA Mortgage Loans

A USDA home loan is a great deal for borrowers who want to live in a rural area. Like other government loans, these are great deals especially for single-family homes. Although the home can have more land, it cannot be mainly an income property.

For example, it can have space for a large garden and chickens, but not be a commercial farm.

USDA Income Limits

Compared to other types of home loans, the USDA limits how much money you can make. It depends on the location, and you can see the income limits here. Similar to other government loans like FHA, these loans have the purpose to get borrowers into homes, not build their property portfolio.

USDA Loan Down Payment

You can get into a USDA loan with zero down!

No Private Mortgage Insurance

Even with zero down, USDA loans don’t have private mortgage insurance. But, they do have something called an annual guarantee fee. The good thing is that the fee is less than PMI.

Income Requirements

Although you can’t make too much money, your income still has to cover your bills and mortgage payment comfortably.
The maximum DTI for most USDA loans is 41%. Here’s an example of a 33.3% DTI.

• Total monthly debts – $2,000
• Gross monthly income – $6,000

The calculation would be $2,000 divided by $6,000 = 33.3%.
If you receive child support, you may be able to count it in your income. Check with your loan advisor.

USDA Loan Alternative

If you’re shopping in a rural area, check out USDA loans first. Otherwise, FHA and conventional are the other choices unless you’re eligible for a VA loan.

Homestead is a top lender of USDA home loans for purchasing and refinancing. Our rates are some of the lowest in the states we serve. Our loan advisors provide excellent service, as you can tell from our reviews. Plus, we close fast!