USDA still provides 100% financing home loans in many parts of Georgia. Many homebuyers are surprised to learn exactly what locations are still considered rural eligible. The truth is many locations just outside of the major cities like Macon, Albany, Columbus, Thomasville, Savannah, Valdosta and Augusta still qualify for USDA financing today. USDA home financing is a perfect solution for Georgia first time home buyers that want to purchase their first home, but have limited funds to do so. Below we will look at the USDA Loan Criteria Georgia, and benefits it provides home buyers.
- NO Down Payment – Unlike most other types of mortgage financing, USDA mortgages in Georgia require no down-payment which makes it easier for first-time home buyers to own homes.
- Less Than Perfect Credit Scores Possible – because USDA 502 guaranteed loans are backed by the government, those with a “less than perfect” credit borrowers have an easier time getting approved for a USDA loan. As of 2017- 2018 the programs requires a min 620 score to be approved.
- Low 30 Year Fixed Interest Rates – Since Rural Housing guarantees these loans against default, therefore USDA loans usually have better interest rates than most conventional mortgage loans. Also since they are guaranteed by the federal government, lenders are more likely to offer the program. The USDA program is a standard 30-year fixed mortgage with no early payoff penalty.
- Low Monthly Mortgage Insurance – Monthly PMI is much less when compared to other FHA and conventional loan programs. In fact, the monthly mortgage insurance is almost half as less as the FHA loan.
USDA rural housing does have a few eligibility requirements, and understanding these requirements is very important. USDA household income and property location are the two keys. It is a good idea to find out the eligibility based off your household income and the location of the home you are planning on buying or refinancing. At Five Stars we will guild you through the entire process. We encourage any home buyers that have questions to call us at 800-871-2636.
The USDA home loan has many different names. It is often called the USDA Rural Home Loan, Rural Development or 502 Guaranteed Home Loan. All USDA 502 loans are offered through approved USDA lenders only. Of course, 100% financing is the main benefit to USDA financing and even today it remains the only no money down loan program in Georgia (excluding the VA loan) We will go over most important USDA lending requirements below.
USDA Mortgage Eligibility
To be approved and eligible, borrowers must:
- Have an adequate and dependable income. A solid two-year job history is often needed.
- Be a U.S. citizen, qualified alien, or be legally admitted to the United States for permanent residence.
- Have an adjusted annual household income that does not exceed the moderate income limit established for the area. A family’s income includes the total gross income of the applicant, co-applicant and any other adults in the household – EVEN IF THEY ARE NOT APPLYING FOR THE LOAN. Applicants may be eligible to make certain adjustments to gross income— such as annual child care expenses and $480 for each minor child—in order to qualify. Please click here for the USDA income calculator.
- Have a credit history that indicates a reasonable willingness to meet obligations as due. 640 min credit score ( 620 scores can be done with strong compensating factors)
- Have repayment ability based on the following debt to income ratios: Housing debt cannot exceed 30%. Total monthly obligations with housing / gross monthly income cannot exceed 42%.
USDA Property Eligibility:
You’d be surprised as to what homes are in USDA eligible areas. Reach out to us if you would like to discuss the USDA approved area around your town. Typically towns on the outskirts of larger cities ( like Macon, Albany, Columbus, Savannah, Valdosta and Augusta) and less than 30,000 residents apply, however you would be surprised where the areas are. Please click this link Property Eligibility and begin your search. If you have any questions, please contact us below.
- Guaranteed loans can be made on either new or existing homes; Existing homes must be structurally sound, functionally adequate, and in good repair. There are no restrictions on the size or design of the home financed.
- The home must a primary residence – no investor home purchase. Property cannot be income producing (Farm, Cattle Ranch, etc)
- Homes must be located in rural areas, check the map above. The seller of the home is not important, only where the property is located.
Highlights of the USDA Guaranteed Rural Housing Loan Program
- Loans may be for up to 100 percent (101% LTV if the 1.0 % guarantee fee is included in the loan) of appraised value or for the acquisition cost, whichever is less.
- $0 money down.
- Mortgages are 30-year fixed rate at market interest rates.
- Loans may include funds for closing costs, the guarantee fee, legal fees, title services, cost of establishing an escrow account and other prepaid items, if the appraised value is higher than sales price. Sellers may contribute to the buyer’s closing costs.
- Home buyers make application with approved Florida USDA lenders. Please contact us if you would like to begin the process.
- Buyers must personally occupy the dwelling following the purchase.
- Loans may be made to refinance either existing USDA Rural Development Guaranteed housing loans or our Section 502 Direct housing loans.
If you need assistance or want to learn more, please reach out to us. For quick service please submit the “Request Contact” form at the top of your screen. Please also be sure to call ph: 800-871-2636 and visit www.FiveStarsMortgage.com for the latest mortgage info.