A USDA loan is a great option for homebuyers looking to relocate to certain rural areas. Although they are a beneficial program offered by the United States Department of Agriculture, USDA loans aren't just for farmers! They're a zero down payment mortgage option designed to improve the overall quality of life in rural America.
The Rundown on USDA Loans
Who is Eligible for USDA Loans?
There are certain income limits and specifications for those seeking USDA loans. In Johnson County, it depends on your household size. For example, if there are 1 to 4 persons in the home the total income cannot exceed $96,950. If there are 5 or more persons in the home, the total income cannot exceed $127,950. You can find more information about what the limits are for specific communities on the North Carolina USDA Loan Program website.
What Do I Need to Apply for a USDA Loan?
There are a number of requirements for applying for USDA loans. They include steady income for at least 24 months, a good credit history with no accounts sent to collections in the past year, and U.S. citizenship to start. Generally speaking, you also need a great credit score. In fact, credit scores of 640 or higher receive streamlined processing. To begin the process of applying for a USDA loan, you should talk with a participating lender. Let us know if you need a recommendation!
The Types of USDA Loan Programs
Loan
Guarantees
In this case, the USDA will guarantee a zero-down-payment loan issued by a participating lender. This means the buyer will have low interest rates. However, they will have to purchase a mortgage insurance premium.
Direct
Loans
Direct loans by the USDA are for low and very-low income applicants. They feature interest rates as low as 1%. Income specifications vary from county to county.
Home Improvement
This isn't a mortgage, but a loan or a grant offered to applicants looking to perform major repairs or upgrades on their homes. They usually provide up to $27,500.
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