USDA loans are developed by the United States Department of Agriculture to target low-to-moderate income borrowers in rural areas to help them afford financing purchases or refinances. This program is for borrowers who may not qualify for conventional financing.
USDA purchase facts:
- Must have a minimum credit score of 640
- Adjusted household income cannot exceed limits set by USDA for the area*
- The appraisal determines the maximum loan amount
- 100% of the appraised value may be borrowed for the purchase
- Only borrowers that are on the note may use income to qualify
- May only have one additional home (other than the primary residence) with a USDA guaranteed loan
USDA refinance facts:
- Minimum credit score is 640
- The loan must be secured by the same property as the original loan
- The previous loan can only be Guaranteed Rural Housing (GRH) or USDA
- Cash out refinance is not an option for USDA loans
- Additional borrowers can be added to the new GRH loan or deleted from the current loan
- Manufactured Homes & properties with water purification systems are NOT eligible properties for USDA loans
If you have any quesitons about USDA loans, please leave a comment or send us a message.