New American Funding USDA Loans – 2019
New American Funding USDA loans: The U.S. Department of Agriculture (USDA) backs loans which are offered to low to moderate income buyers in areas of the United States which meet the requirements. These loans offer very favorable terms to those who are eligible to apply. Finding a lender for a USDA guaranteed loan is a lot easier than it used to be thanks to New American Funding, a family-owned mortgage lender offering loans in nearly every state.
Understanding USDA Loans
Many borrowers think they are not eligible to apply for a USDA loan which is also known as a USDA Rural Development Loan (RD Loan). However, the loans are offered to borrowers who fall within 115 percent of the income range of the area in which they are purchasing property. In addition, while the word “rural” is in the name of the loan, there are plenty of suburbs across the United States which offer qualified properties.
In the case of USDA loans, rural applies to those communities where the average population does not exceed 10,000, or where a community has fewer than 20,000 residents and low- to moderate-income families face challenges obtaining mortgage credit.
Benefits of USDA Loans
There are numerous benefits associated with USDA loans including no down payment options. Additionally, many lenders, including New American Funding will provide loans to those potential home buyers who have less than perfect credit, or may need to show alternative credit such as a history of paying rent and utilities on time because they have no other forms of credit. USDA loans also offer funding for more than 100 percent of the purchase price and do not require the borrower to purchase private mortgage insurance (PMI) as a loan condition.
USDA loans can also be used to fund upgrades to a property to accommodate residents who have physical limitations. Many potential homeowners who might not otherwise qualify for a mortgage loan can often be approved for a USDA loan which is excellent news.
Determining Your Eligibility for a USDA Loan
As with most loans which are government-guaranteed, there are eligibility requirements which must be met. Naturally the first requirement is the property falls within the guidelines of what the USDA will guarantee. However, there are also specific requirements which the potential homeowner must meet as well.
- Income Eligibility – depending on your location, you can make as little as $28,100 and as much as $128,850 depending on your household size and location and still qualify for a USDA backed loan.
- U. S. Residency – qualified borrowers must be citizens of the United States, Qualified Aliens, or may be a U.S. non-citizen national.
- Debt to Income Ratios – your total housing costs may not exceed 29 percent of your monthly income. Keep in mind, this includes your mortgage payment, property taxes, and insurance on the property.
- Occupancy Requirements – buyers must intend to occupy the purchased property as a primary residence. Properties which are intended as investments are not eligible for USDA guarantees.
- Additional Income Requirements – borrowers must be able to demonstrate 24 months of continuous employment to qualify for a USDA backed loan.
- Additional Credit Requirements – while borrowers with a credit score of as low as 580 may qualify for a USDA guaranteed loan, any borrower who has had a credit account enter collection status in the last 12 months may have to wait for up to one year to qualify.
USDA Loan Options
Perhaps one of the best features of USDA loans is the broad range of uses. USDA backed loans can be used for renovations, repairs and purchases for low-income borrowers. Additionally, there are mutual self-help loans which allow borrowers the flexibility of building their own home and contributing to the equity in the home by working on the construction project.
Loan terms are more flexible for USDA loans than for other similar loans. For example, while most mortgage programs cannot exceed a loan term of 30 years, USDA offers loans which amortize for up to 38 years if the borrower qualifies for these unique terms. USDA guaranteed loans may also be used for the purchase of a mobile home which is unique, since most mortgage companies do not offer this option. Factory built, or manufactured housing options are also available.
Borrowers who meet the income guidelines, can identify a property that qualifies for a USDA guaranteed loan and who can demonstrate a solid employment history may be surprised to find they can qualify for a USDA loan when they have been unable to qualify for other types of mortgages. If you are interested in learning more about USDA loans and determining whether you may be eligible, you can learn more about New American Funding’s USDA loan program offerings by reviewing the information on their website. Just because you may be a low or moderate income borrower does not mean you have to give up on your dream of owing a home, the family-oriented company New American Funding may have a loan program that fits your needs.