First time home buyers around Gainesville should take note that most of Alachua County is still eligible for the 100 percent USDA Rural Housing program. The towns of Alachua, Archer, Hawthorne, High Springs FL, La Crosse, Micanopy, Newberry and Waldo are all approved for $0 down home financing. For those that haven’t heard of this great government backed home loan, let’s take a closer look. Basically the United States Department of Agriculture ( USDA & Rural Development) offers 100% home loans in approved rural locations throughout Florida. USDA Rural Housing is a great fit especially for first time home owners that have little cash saved up, after all it’s the last 100% home loan in Florida. The USDA program has invested almost $20 billion in 2014 to help nearly 140,000 families nationally buy and improve their homes. The program is designed to expand Florida’s rural communities by making home ownership affordable. USDA offers Alachua County home buyers low 30 year fix interest rates with no down payment needed. Many buyers are surprised to find just how the application process is. For quick 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. Please also be sure to call ph: 800-871-2636 and visit www.FiveStarsMortgage.com for the latest mortgage info.
USDA Rural Housing home loans are government backed and typically used by low to medium income households to purchase homes in eligible “rural defined” locations throughout FL. Great for first time home buyers, the USDA home loans are available in all 50 states to qualified applicants. The general guidelines for the loan program are the same throughout all eligible areas in the US.
There are a few different types of USDA mortgage programs interested home buyers should be aware of:
Direct USDA program: These loans are processed directly by the local USDA service office. These loans are strictly for very low income households and income thresholds vary by region. To apply, contact your local USDA Rural Housing office.
USDA 502 Guaranteed program: These loans are catered to more of a average household incomes. Most USDA loans fall into the 502 Guaranteed program. Due to the higher volume, the 502 loans are processed and underwritten only by approved USDA lenders and banks, and are insured through the USDA’s Rural Development program. Contact us at ph: 800-871-2636 if you would like to apply. The 502 Guaranteed program allows home buyers to get a low interest rate, even without a down payment.
USDA Interest Rates & Terms
The standard term is a 30 year fix with interest rates that are comparable with any other 30 year government mortgage programs. Because of the terms of a USDA home loan, payment are lower than most other loans on the market today. There is no maximum loan amount. There is a annual fee that is 0.5% of the loan amount per year broken down into 12 monthly payments – monthly PMI.
USDA Loan Eligibility Factors
First and foremost the home being purchased must be located in a USDA approved area – Most of Alachua County is approved. Alachua, Archer, Gainesville, Hawthorne, High Springs, La Crosse, Micanopy, Newberry, Waldo FL are approved locations. Basically the immediate area around Gainesville is the only location in the county NOT approved as of 2015. As for the seller of the home, it can be anyone, the home just needs to be located in a USDA approved area.
Second – the income for the household must be below the set USDA income limit here.
USDA Loan Approval Criteria
To be eligible the applicants middle credit score must be at least a 620 with no major financial issues in the last 4 years – bankruptcy, short sale, foreclosure, etc. The standard debt to income (DTI) ratios for the USDA RD mortgage is 29%/41% of the gross monthly income of the applicants. USDA will sometimes allow slightly higher ratios with strong compensating factors. There are no guidelines on the amount of applicants per loan, however, non occupying co-borrowers are not allowed, therefore, applicants must provide evidence that they will occupy the home.
Property / House Requirements
The USDA’s Rural Development home loan program requires that the home being purchased meets standard HUD handbook guidelines 4150.2 and 4905.1. These guidelines are typical for all government backed loan like FHA or VA. Any problem with the home being purchased that would impact safety and overall livability could be an issue. Small issues are not a concern and are always expected. USDA Rural Housing is more concerned with major safety issues – think major electric issues, HVAC, roof issues, etc. Existing manufactured housing is not permitted unless it is already financed with an USDA loan. However, most lenders, use included, will not process mobile/ or manufactured housing loan requests in any capacity.
Contact Five Stars at ph: 800-871-2636 with any questions about applying for a USDA loan. Serving – Gainesville, Alachua, Archer, Gainesville, Hawthorne, High Springs, La Crosse, Micanopy, Newberry, Waldo FL