USDA Home Loans

USDA Home Loan Information

Welcome,

If you are looking for information on the USDA Home Loan offered thru USDA Rural Development and Rural Housing Service you've landed in the right place. 

This particular loan program seems to have many names.  It is often called the USDA Rural Home Loan or Guaranteed Home Loan.  No matter the name it all comes from the same place and has the same requirements.

I have been helping families and individuals with the USDA Home Loan since 1996.  I get allot of questions from home buyers and realtors so I thought I would create this blog as a reference and resource to help educate you on the benefits of purchasing a home thru the United States Department of Agriculture - USDA Home Loan. 

Take a look around  - I have provided you with basic information and guidelines

USDA Credit Guidelines  - USDA Income Limits - USDA Property Requirements   

Hopefully this will help you with your decision to buy a home, learn of the benefits available to you thru the USDA Home Loan and help you make an educated and informed choice about the loan options available to you when purchasing a home.

If I left something out or you require more information please let me know.  In the mean time feel free to roam around, leave a comment or share with others.

You can apply for a USDA Home Loan here.

Thanks for stopping by.

USDA Home Loans taking longer than usual!!!

Why do USDA Home Loans take so long?

How long does it take to get a USDA Home Loan?

How do I know what date USDA is working on?

These are just a few of the questions I have received lately regarding the USDA Home Loan Program.  We understand the frustration. 

More and more families are taking advantage of this great loan program to purchase a home.  The increased volume of  USDA Home Loan Applicants has taken it's toll on the local USDA office and they are currently behind on reviewing loan applications.   They have asked for closings to be scheduled accordingly and patience as they work on your files.

 This link will keep you up to date on the current processing times at the Washington State USDA Office. 

I really didn't want to post this.  I don't want anyone to be discouraged from applying for a USDA Home Loan.  The current processing time lines should not deter you.  This is still a great home loan that allows you to buy a home with No Down Payment.  Hopefully they will get caught up soon and it will be back to business as usual. 

Thanks for stopping by......

The clock is ticking if you want to take advantage of $8000 Tax Credit with a USDA Home Loan

There are less than 100 days remaining until the First Time Home Buyer Tax Credit Expires.  If you are thinking of purchasing with a USDA Home Loan you have even less than that.  With so many families purchasing homes with the USDA Rural Development Program the Washington State Office is currently 3 weeks behind.

The $8000 First Time Home Buyer Tax Credit expires on November 30th.   I do not recommend you choose Novemebr 30th or even the week before as your closing date.  There will be a mad rush to get thru closing during this time.  Factor in the Thanksgiving Holiday and allow for the chance that something might go wrong and your new deadline is at least on or before November 2oth. 

Your application including the home you wish to purchase must be processed and underwritten by your Lender before going to USDA Rural Development.  The entire process is running about 45 days from the time you have a contract on your home until closing.   If we look backwards you have until October 6th to be pre-approved for a USDA Home Loan, find your home and be under contract.  That is about 42 days from now. 

If you would like more information on the USDA Home Loan or you are thinking of taking advantage of the First Time Home Buyer Tax Credit and would like to be pre-approved for a USDA Home Loan you can reach me via email at cherylaorr@yahoo.com or call 425-330-9098. 

USDA Home Loans - New Income Limits Effective 4/20/2009

New Income Limits for the USDA Home Loan Program 

Finally.....It seems as though we have been waiting for months for these new limits to happen.  There have been lots of questions and some confusion the past few months over the Proposed Income Limit Modification.  

Here's the scoop -

The New USDA Income Limit Structure will be based on a 2 tier system consisting of a 1-4 member household and a 5-8 member household.  This is great news for families who may have been over the USDA income limits.  The new limits will not be posted until Monday April 20th so check back at that time to learn if you qualify for a USDA Home Loan based on the New Income Limits.

In the meantime if you would like more information on these changes or an estimate on what the new limits will be feel free to contact me at cherylaorr@yahoo.com.  For Property Information here are the USDA Property Maps for a general idea on eligible areas.  For more specific information you can visit the USDA Property Eligiblity Calculator.

This information is intended as a guide only.  Never assume that you may not be eligible for the USDA Home Loan without talking to a qualified USDA Lender.

Thanks for stopping by.........

Cheryl Orr   

USDA Home Loan Specialist

Washington State 

 

USDA Home Loans - Interest Rates

I cannot believe these interest rates.  If you have given any thought towards the purchase of a new home you need to act quickly.  Call it an early Christmas Present a New Year's Goal.  Call it anything you want.  Interest rates are testing historical lows and that means lower payments for everyone!  I have been doing this for a long time and can barely remember seeing rates this low, if ever.

If you previously applied for a home loan and didn't qualify for enough to purchase a home you need to try again.  Call your Loan Officer (or you can call me) and see where you qualify now.  The market is changing.  Home prices in our area have dropped and these lower rates and lower home prices may help you out.  

If you are interested in learning more feel free to give me a call at 425-330-9098 or send me an email me at cherylaorr@yahoo.com. 

You can apply for a USDA Home Loan here.

USDA Home Loans in the News - WSJ

Home Buyers turn to USDA for Home Loans.  This is a great story reported in The Wall Street Journal about USDA Home Loans  and it's increasing popularity. 

Notice at the bottom of the article it states that USDA has received funding for the program thru March but the increased demand is definitely taking it's toll.  Funds may run short this year if we do not receive additional funding.

With the increased demand and lower interest rates currently available it may be a good time to start thinking about that home purchase.  If you are thinking of purchasing a home with the help of a USDA Home Loan time may be running out.   Let's keep our fingers crossed that additional funding will come available when we get to that point.

Happy Labor Day Weekend

It's the last big weekend of summer.  How are you celebrating?  It looks like the weather here in Washington State will not be too promising for camping unless you bring your rain gear and a blue tarp.  I think we will stay close to home and have a barbecue with family and friends. 

Wrapping up the week it appears as if the market may be picking up a bit.  Had quite a few inquiries for the USDA Home Loan this week and with all of the great buys out there in the market right now I am sure some great deals will be made this weekend.  I know my clients are excited to get out and shop for a home.  Allot of families would not get the chance to buy a home without the help of this program.

Interest rates for the USDA Home Loan did not see allot of movement this week.  Typically the interest rates stay even with FHA interest rates.  I know some people think the interest rates are higher on USDA Home Loans because they do not require a down payment but that is not the case. 

Whatever your plans I hope you enjoy them to the fullest!

Cheryl  Orr - Your Washington State USDA Lender offering USDA Rural Development Home Loans since 1996!

                                                                                                                                                                           

USDA Home Loans - Credit History

I wrote a post earlier about USDA Home Loan Credit Score Requirements.  This post explains a bit more regarding your Credit History, and what is acceptable for a USDA Home Loan.

Basically the requirement states that you must have "a credit history that indicates a reasonable ability and willingness to meet obligations as they become due"

No Credit History:  If you have no credit history we would establish a credit history for you by providing at least 3 and hopefully 4 alternative credit sources.  These are items such as your rental history, cell phone, utility, cable, daycare, storage etc.  We ask the creditor to provide your payment history and we have them added to your credit profile.  There are many people who have never used their credit and have no scores or documented history.  Under the USDA Home Loan Program this is acceptable and does not eliminate you from qualifying for a home loan.

The following items are considered unacceptable unless we can provide evidence that the cause of the problem was beyond your control, were of a temporary nature and have been removed and/or remedied.

• Bankruptcies must be discharges 36 months from date of application.
• Judgments must be paid 12 months prior to date of application.
• Foreclosures must be 36 months from date of application.
• Two or more rent payments paid 30 days late with the past 3 years.
• Accounts that have been sent to collection within the past 12 months.
• Collections that are outstanding with no arrangement for payment.
• Charge-offs that have occurred in the past 36 months.

It's important to remember that these are just basic guides and you should never assume that you may or may not be eligible for a USDA Home Loan without speaking to a qualified USDA Lender.   

USDA Home Loans - Credit Score Requirements

Credit Scores Requirements for USDA Home Loans

Currently there is no minimum credit score requirement, however scores below 620 may require a more stringent review of the credit history along with documentation to support the lower credit scores. 

This review would require looking at the most recent 12 months rental history.  Possibly providing a written explanation regarding the lower credit scores.  This letter is very common and is written to establish your intent for good credit.  The letter should explain the reasons behind any negative items on your credit report as well as explain that the circumstances surrounding these items were temporary, beyond your control and you have started and/or made progress towards correcting them. 

Items such as medical collections, a missed payment or perhaps you were layed off for a short time, had an illness or death in the family.   These are very common and it is understandable that people have things in their lives that can effect their finances and credit history.   

That is one of the great things about the USDA Home Loan - it is what we like to call "make sense" underwriting.

On the flip side scores 620 and above are considered to be a good score and in some cases may allow for a few dings such as a late payment or owing collection on your credit with no review at all.

Please remember that this is just a basic guide to help you learn about USDA Home Loans.  You should never assume that you may or may not be eligible to purchase a home through this program without first speaking to a qualified USDA Lender. 

USDA Home Loans - Eligible Income

In my previous post I talked about USDA Home Loan Income Limits.  Before we determine if you meet the Income Limits we need to determine your annual income.  USDA income determinations are based on your current and projected income.  If it is difficult to determine the current projected income we are allowed to use  an average of the previous 12 months.

The types of income that may be considered include:

Current verified income from full or part-time employment including

• Seasonal work
• Commissions
• Overtime
• Bonuses
• Unemployment compensation
• Tips
• Car Allowances

Other types of income we may consider include:

• Social Security Income
• VA Benefits
• Disability Income
• Retirement Income
• Interest & Dividends
• Alimony & Child Support

When calculating your income for a USDA Home Loan  we always use your Gross Income before any deductions for payroll taxes or employee benefit programs.   Since the USDA Home Loan has the Income Limits it is very important to make sure your income is determined correctly and we are able to fully document where the income is coming from and how it is paid to you and that it will continue to be paid.

Of course there are other types of income that people receive and there are also types of income that we are not able to use such as Foster Care.   

This information is intended as a guide only.  Never assume that you may not be eligible for the USDA Home Loan without talking to a qualified USDA Lender. 

USDA Home Loans - Income Limits

The USDA Home Loan income limits in Washington State are not that bad.  The limits vary per County and the number of people living in the household.  We are allowed to deduct $480 per child, annual child care expenses and $400 for elderly or disabled persons from the gross income.

For example: 

Family of 4 - Mom, Dad, child age 14 and child age 6.   

Gross annual income before any deductions is $91,000.  The Income limit for Snohomish County is $88,400.  Let's assume the 14 year old no longer requires childcare but the 6 year old goes to an after school daycare program during the school year and full time during the summer. 

USDA Income Limits were updated 4/20/2009....

• Gross Income $91,000
• Deduct $480 for 14 year old
• Deduct $3,900 child care for 6 year old
• This brings our income to $86,620 which is below the County Limit of $88,400.

That's great news!  This family meets the income guidelines established by Rural Development. 

To find out if you are eligible under the income limits for Washington State be sure to visit my post on USDA Income Calculation to learn about the types of income considered eligible for a USDA Home Loan as well as how your income will be calculated.  There is also a great income calculator on the USDA Income Eligibility Website.   

Never assume that you may not be eligible for a USDA Home Loan without first speaking to a qualified USDA Lender.