If you are a first time home buyer, the time has never been better to explore financing through the USDA loan program. With subprime loans gone in the market, many first time buyers are left with questions about what is the best option for them. USDA loans may in fact be the answer. While USDA mortgages haven't been as popular in recent years because of the perceived amount of bureaucracy associated with obtaining a loan guaranteed by a government entity such as the HUD, new legislation is in the works to help make them more consumer-friendly.
First time home buyers represent a large share of the lending market and they receive a lot of attention. Many do not have established credit histories or a lot of money to put down for a down payment (because they are usually fresh out of college or still early in their careers). Currently, USDA loans require no down payment to obtain financing and have different loan limits in each county. Apply now to obtain more information about the limits and down payment requirements in your area with USDA Loan Texas.com. The USDA might just be the answer for your home mortgage.
Credit score - One of the primary market benefits of a USDA loan has always been that credit scores were not a factor. A borrower with great credit scores could definitely have their loan approved more easily, but someone with some credit problems could still get approved - provided they had a well documented common sense explanation for their credit problems and could show that the problem had been resolved. In spite of not relying on credit scores, USDA foreclosure rates went down while conventional mortgage foreclosure numbers went up in spite of their almost excessive reliance on credit scores. The USDA underwriter will evaluate the entire credit profile to determine the borrower’s likelihood of repayment. Past credit issues may be overlooked if new credit has been re-established. Also, other compensating factors may apply. Generally a credit score of 620 is needed for automated approval.
Why Choose a USDA Loan:
- 100% financing of sales price up to 102% of APPRAISED value. This can include ALL closing costs, pre paid items, and even refund escrow deposit in many cases.
- NO PMI! This means lower payments for YOU!
- USDA’s definition of rural is not the same as what you may think. If you check the property eligibility for your area you'll be thrilled to find out if your house qualifies.
- No Loan Limits!
- All homes, condos and town homes qualify if there are in an "eligible area".
- As long as you have a 620 score, you do NOT have to explain any prior derogatory credit or pay off any of your collections.
- Sales concessions are NOT needed in most cases (seller paid closing costs).
Check USDA Income Eligibility or you can check here as well
USDA Property Eligibility Check
MAKE SURE A USDA LOAN TEXAS.COM SPECIALIST HELPS YOU! While this is not a new loan program, not many lenders understand the USDA loan program or the mechanics.
USDA fixed rate loans are the most popular programs for USDA financing. Unlike an adjustable rate mortgage, your payment will stay the same for the duration of the loan. Since USDA loans require no down payment, and allow the seller paid closing costs, you can often buy a home more easily.
