Buyer looking to purchase a home in Live Oak, Lake City, Macclenny FL and surrounding communities can purchase a home with NO down payment thanks to the USDA rural housing loan! USDA Rural Housing loan is offered by approved USDA lenders / banks in select locations around Florida. The great news is all of Suwannee County, Columbia County and Baker County is approved for the USDA loan! USDA rural housing mortgages are especially a good program for first time home buyers that have little cash savings for other loan programs that require a down payment.
Even if you are a home buyer that has 3% or 5% or 10% for a down payment, you should take a close look at the USDA loan. Why? mortgage insurance!! The monthly mortgage insurance (PMI as most know) with a USDA loan is much cheaper per month when compared to FHA or conventional loans. The USDA program even allows the home seller to pay all the buyers closing costs resulting in little to zero out of pocket money from the home buyer. The primary hurtle to homeownership is down payment, especially for Florida first time home owners. With the 100% USDA RD home mortgage, homeownership is still possible.
How does a new borrower know they qualify for a USDA/ RD home loan?
To be approved for this loan there are 2 primary factors: First, you must purchase a home in a rural eligible area. Again, all of Suwannee County, Columbia County and Baker County is approved for the program.
Second, the household income must be below the set limits that are in place for each county in Florida. Click here for more details on USDA income restrictions in Florida
As for USDA loan pre approval and loan qualifying, below we have listed some important factors:
- Debt to income (DTI) : Banks and mortgage companies will take a look at your debt-to-income ratio. The PITI (mortgage principal, interest, taxes and home insurance) must be less than 29 percent of your monthly income. All additional monthly debt can be no more than 42 percent of your income. These limits can be slightly exceeded sometimes with strong compensating factors.
- USDA credit score qualifications: 620 and above is needed by most lenders. Additional requirements may apply in for any home buyers that have had a past credit bumps like a bankruptcy , short sale, foreclosure, etc
- Job and work history: solid 2 years history is needed. Does not need to be with the same employer, just more “continuous” This rule does not apply to recent college graduates.
Keep in mind, USDA Rural Development has two different types of mortgage programs. The USDA direct program and the 502 Guarantee program. The USDA direct program is given directly by the USDA. The 502 Guarantee program is given only by approved lenders and banks. Most cases lower income borrowers will use the direct program. Moderate income households will use the 502 Guarantee program.
|USDA Direct Loan||502 Guaranteed Loan (most buyers)|
|Loan made by||USDA Directly||Third party (such as a mortgage lender, broker, bank)|
|Use||Low-income consumers||Higher income ranges|
|Income Standards||Household income less than 80% of area median||Household income less than 115% of area median|
Suwannee County – Branford, Dowling Park, Live Oak, McAlpin, O’Brien, Three Rivers, Wellborn. Columbia County including, Fort White, Lake City, Lulu, Watertown. Baker County – Glen St. Mary, Macclenny, Sanderson FL
Questions? We are ready to help 7 days a week. For fast service please submit the “Request Contact” form at the top right side of your screen. Mobile users can find the short Request Contact Form here. Be sure to also visit www.FiveStarsMortgage.com for the latest USDA loan requirements in 2015.