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What is an USDA Loan

Lending Hand Mortgage,  provides USDA or “RD” loans through participating lenders at competitive interest rates. The USDA loan is a government-sponsored program created to provide financing for families in rural areas up to 100% of the purchase price. Whether you need a USDA loan for home purchase or are seeking help with a mortgage refinance.

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Learn more about how you could qualify for a Florida USDA loan.

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Why people get USDA loans

USDA loans are offering 100% financing to eligible home buyers in less-dense areas of the country.

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USDA Requirements

USDA loans are easier to qualify for than other loan programs that require a high down-payment.

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USDA loan qualification requirements

USDA loan eligibility varies according to your financial situation.  USDA loans are offered to qualified persons, regardless of profession, so long as they meet income and location requirements.

Beyond the property and income requirements, the USDA also requires that you:

  • Agree to personally occupy the dwelling as your primary residence
  • Be a U.S. citizen, U.S. noncitizen national, or qualified alien
  • Have the legal capacity to incur the loan obligation
  • Have not been suspended or debarred from participation in federal programs
  • Demonstrate the willingness to meet credit obligations in a timely manner

Contact us today to get PreQualified for an USDA Loan.

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USDA Loan Benefits:

  • No Down Payments
  • Opportunity to finance some closing costs into the purchase (only if appraised value is greater than the contract sales price)
  • Small sum of monthly mortgage insurance vs. FHA financing
  • Gifted funds allowed
  • No maximum loan size
  • Lower credit scores allowed vs. conventional financing

To qualify, the borrower’s income and the location of the property are regarded. Determine if your income/property meets eligibility requirements.

Five USDA mortgage facts you need to know.

1.

USDA loans are not just for farmers.

While home you would like to purchase must be in a rural area by the USDA definition, this will often include suburban areas as well, and many home buyers will be surprised to see that even homes in some mid-sized cities are sometimes eligible. Click here to find out if a property is USDA loan eligible . However, the USDA loan program is for residential properties, not income-generating farms.

2.

USDA loans do not require a down payment.

If you qualify for a USDA loan, you can finance 100% of the purchase price, so you don’t need a down payment.

3.

USDA Mortgage insurance is required and affordable.

USDA loans require mortgage insurance to keep the program in operation: a 2% upfront fee required at closing and a .40% annual fee of the principal. The good news is you can roll the 2% into your loan amount, so your additional monthly payment is just .4% of your balance.

4.

USDA loans cover a wide range of property types

Examples of types of properties are eligible for a USDA mortgage:

  • Existing homes
  • Manufactured homes
  • New construction
  • Condominiums
  • Modular homes
  • Planned Unit Developments (PUDs)

5.

USDA loans have income limits

The USDA loan program is designed to make owning a home affordable for rural families.

In some areas where the cost of living might exceed the national average, income limits are adjusted to reflect that.

Please call one of our  loan specialists at Lending Hand Mortgage to discuss your qualification

Is a USDA loan right for you?

If you’re in the market for a new loan, a USDA loan might just be the perfect solution for you and your family. To find out more about USDA loan requirements, contact one of our loan specialists at Lending Hand Mortgage toll-free today at 1-888-340-8337.

GET PREQUALIFIED

USDA Requirements

USDA guaranteed home loans can fund only owner-occupied primary residences.

Additional eligibility requirements include:

  • U.S. citizenship or permanent residency (Geen Card).
  • A monthly payment which includes principal, interest, insurance, and taxes. That is 29% or less of your monthly income. Additional monthly debt payments you make cannot exceed 41% of your income. Nevertheless, the USDA will review higher debt ratios if you have a credit score above 660.
  • Dependable income, typically for a minimum of 24 months
  • An acceptable credit history. This means no accounts converted to collections within the last 12 months and other criteria. You may still qualify by proving that your credit was affected by circumstances that were temporary or outside of your control, including a medical emergency.

Applicants with credit scores of 620 or higher receive streamlined processing.

Those with scores below 580 must meet more stringent underwriting standards.

Finally, those without a credit score can qualify with “nontraditional” credit references, such as rental and utility payment histories.

Don't Forget About Your Closing Checklist

As the buyer and borrower, you will have items on your checklist that are required by your lender, the seller, and even the title company.

The closing checklist covers all the fees to be paid, the information to be provided, and the disclosures to be signed before the title is conveyed to you. Having this checklist ready helps you stay on track as a buyer, and ensures that your closing goes the way you expect.

IDENTIFICATION

All parties at the closing should have valid ID.

POLICY OF TITLE INSURANCE

You must pay for title insurance that guarantees the property is free of previous claims or liens.

INSURANCE

Before you can close on the property, you need to secure homeowner’s insurance, which insures the property in the case of damage.

CLOSING FUNDS

You must bring all funds agreed upon, in the form of a cashier’s check or via electronic wire. This is waived if you selected to finance the closing fees.

Take the time to discuss the items on your checklist with our loan officers, to make sure you forget nothing.  You will have the peace of mind that after the closing settlement and you’ll be able to move into your new home.

Find the right Lending Hand loan officer near you to assist you with all your lending needs.

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Why a Lending Hand Mortgage professional?

Lending Hand Mortgage (NMLS #373538) prides itself on providing unparalleled customer service and earning satisfied clients. Our purpose? Satisfy the mortgage needs of our customers and exceed their expectations.

We work with underwriters and loan processors from the application date until closing to gather necessary documentation and guide the file through the approval process.
Our mortgage loan originator is your main point of contact throughout the entire home loan process.

First and foremost, our loan officers are committed to a height standard of honesty and integrity.

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