Providing low mortgage insurance rates, low interest rates, and an unbelievable zero down payment scheme, the USDA Home Loan Program is now the go-to for many families wishing to have their own property in suburban and rural communities all over the country. To qualify, one only needs a handful of easy requirements; two of which are income limitations and credit history .
Income Limitations The main goal of the USDA HLP is to help families in the low to moderate income bracket to realize their dream of having their own house. As such, one of the fundamental requirements for USDA HLP application is the income limits that typically vary from location to location and duly adjusted for the size of the family.
The income requirement for the USDA Home Loan Program is anchored on a familys ability to repay the loan. This is often assessed using the familys debt-to-income ratio, otherwise known as the DTI. The debt portion of the DTI is focused on monthly credit obligations which can include, but not limited to, monthly housing expenses, vehicle payments, credit card payments, student loan debt, and co-signed loans, among others.
The monthly housing expenses can include the payment for the loan including the principal and interest, real estate taxes, flood or hazard insurance premiums, homeowners association dues, and even special assessments.
Credit History Unlike conventional home mortgage lenders that typically require a minimum credit score of 660, the HLP of the USDA doesnt really require any credit score. However, to facilitate the faster underwriting of your loan using the agencys automated underwriting system, you need to have a minimum score of 640. If you dont have a credit score of 640, your loan will still undergo the underwriting process except that it will be done manually. This means it will take a little longer to have your loan underwritten.
For individuals who may not have a credit score in the traditional sense of the term, they can still qualify for a home loan under the USDA program. All they need to provide is proof that they have been paying bills for the past 12 months. These can include rent, utility bills, personal loans, childcare, car lease, insurance, cell phone bills, medical bills, school tuition, and many more. These are called non-traditional tradeline.
Getting your home is no longer just a dream. With the easy and flexible requirements of the USDA Home Loan Program, bagging that dream home is now a reality.