Because of the uniqueness of USDA Rural Home Loans, the guidelines are quite different from what is traditionally found with FHA or Conventional loan programs. With that being said, some lenders provide advice that may be well intentioned, but unfortunately is simply not accurate. Homebuyers should remember, there are many USDA “approved lenders” in Florida, however very few actually specialize in the program. Be aware of this when searching for information about USDA Rural Loans.
Here are important highlights that can help with a homebuyer’s qualifying for a Florida USDA mortgage:
- USDA Published guidelines for debt ratios are 29% for housing and 41% for total overall expenses. However, when utilizing the GUS underwriting system ( USDA automated underwriting) and the response is an “Accept”, those debt ratios are considered eligible. The one exception would be in the case of a manual underwriting downgrade which would eliminate the ability for automated processing and those associated benefits.
- Installment accounts with 6 months or less remaining may be removed from the debt ratio calculation completely. This guideline does not apply to revolving accounts such as credit cards. Please be advised that the payment may continue to be included in the debt ratio at the discretion of the lender’s underwriter.
- Debt to be paid off during the loan process? For example, what if funds are available to pay off either a credit card or installment account after a contract has been signed and the loan is in process? This can be permitted, but please note that some lenders may have specific requirements and may not allow debt accounts to be paid off after application has been made.
- USDA Loans are 100% financing, permit home sellers to pay all closing costs.
- USDA mortgages are fixed low interest rates.
The entire USDA loan application process only takes about 15 min to complete. Applicants need not to worry as 99% of the questions asked will be things you already know – Date of birth, social, employment info, etc. To apply for the USDA or other home loan options, please call ph: 800-871-2636 or click here for get started.