Many of you have heard about USDA Rural Development Guaranteed Home Loans, and how borrowers are able to qualify for 103.5% financing without putting any money down.  What many borrowers, mortgage and real estate agents may not know, or fully understand is how easy it is to qualify and fund a USDA guaranteed loan.  In some instances USDA guaranteed loan can be qualified and closed in as little as two and a half weeks!

Unfortunately, the word “Rural” usually brings to mind a farm or barn, or some out-of-the-way backwoods place.  This is not at all the case with USDA Guaranteed Rural Development Home Loans.  While properties that are in the countryside may qualify for USDA financing, the real advantage of this loan program is that it can be used to finance virtually any single family residence in a qualifying area…and just about every county in California qualifies!

USDA Program Highlights

• 103.5% LTV - 100% Purchase Financing
• No Mortgage Insurance
• 30 Year Fixed Rate
• No Loan Limit
• Fees & Repairs may be Financed
• Unlimited Gifts or Seller Contributions
• No Reserves Required
• Homes with In-ground pools can be purchased
• The appraisal determines the maximum loan amount
• Closing costs may be financed when there is equity above the contract price
• Great Loan for Investors - Great financing option for buyers of rehabbed properties

Below are some answers to frequently asked questions that I receive.  While I focus my lending to California, these FAQ’s apply to those seeking USDA guaranteed financing anywhere.

What is a USDA Guaranteed Home Loan?

A USDA Guarantee Home Loan is a government insured loan, which is issued and serviced by a lender.  The loan is for rural areas, which is typically communities where the population is 25,000 people or less.  You would be surprised at how many communities qualify.  Rural does not mean out in the middle of nowhere.  To see if a property you are interested in or listing qualifies, click here.

Are USDA Guaranteed loans only for low-income borrowers?

No, USDA Guaranteed loans are for Moderate Income borrowers.  In most counties in California, as an example, a 1-4 person family can earn up to $74,050.00 per year, in some counties it is even higher, so the answer is that USDA Guaranteed loans are not only for those with lower incomes, but it is intended to be used by moderate income borrowers.  For the exact income limit in your area, click here or email me, and I will let you know what that limit is.

What is the minimum FICO score needed for this loan?

In order to get a loan approved for USDA financing, you generally need at least a 620 Mid FICO score.  I have had loans approved with scores lower than 620, but they are difficult to get approved, and underwriters generally do not approve anything below a 620 Mid FICO.  If you have a 660 Mid FICO score or above, the loan allows for exceptions, such as higher DTI and housing ratios to be considered.

For a complete list of FAQ, visit the FAQ page by clicking here.