USDA Rural Housing Program

• 100% Financing
• No money down
• No PMI
• No cash reserves
• Income limits and location requirements apply * Applicants can be pre-qualified

Highlights:

• Borrower do not have to be first time homebuyers; however, borrowers cannot own additional property at time of USDA loan closing
• Competitive pricing
• If appraisal value exceeds purchase price, closing costs and possible improvements may be included
• No prepayment penalty, no recapture fee
• No limit on purchase price up to current maximum of $726,200 but income restrictions apply
• Minimum credit score of 620 with minimum two trade lines showing current for the past 12 months. Some lenders require a minimum 640 credit score.
• All house hold income for occupants 18 or older must be documented
• Non-qualifying spouse – income counted and credit score acquired along with debts to be considered in ratios
• Up to 6% of the sales price allowed for Seller Contributions
• Debts with more than 10 payments remaining must be included in ratios (Large monthly payments may be considered regardless of remaining time on the debt)
• Non-taxable income (social security, child support, etc.) can be grossed up to 1.25%
• Medical collections require letter of explanation but usually are not calculated in ratios

Limitations:

• Property can be anywhere in Humboldt, Del Norte & Trinity Counties. Homes within the city limits of Eureka are now eligible.
• Must be an owner-occupied – No non-occupant co-borrowers
• Site value cannot exceed 50% of  total appraised value or be potentially devisable
• Impound account for Taxes and Insurance is required
• Pest inspection and work required only IF appraiser calls for inspection
• Streets & roads servicing the property must be paved or have all-weather surfacing
• Qualifying ratios of 29/41 may be “stretched” minimally with compensating factors
• 30-year fixed rate loans, only
• Cannot be delinquent on any Federal loan (i.e.: student loans)
• There is no exact acreage limitation but the land cannot exceed 30% of the appraised value
• Out-buildings cannot be income producing (i.e.; barns for boarding horses) – can include auto or normal garden storage
• Foster care income is not eligible
• Disputed credit accounts must show “paid or resolved” or be under $500 & over 24 months old

Regarding current income and location restrictions:

1. If you are unsure if a particular property is eligible, we can check the address for you.
2. The income limit for a family of up to 4 persons is $111,000 and for a family of 5 or more the limit is $146,500. Borrowers with annual incomes that exceed these limits are ineligible.