USDA Rural Development Loans and Who They Are For
The USDA Rural Developmental Guaranteed Housing Loan Program, which was created by the Department of Agriculture created these zero-down mortgages for homebuyers that elect to purchase a residential property in areas that are zoned or officially recognized as “rural”. These specially-designed mortgages are intended to go to individual applicants that are determined to have a high level of need. Examples include those that do not have housing that is considered to be safe or decent, their income is at or under the “low” income bracket for the area in which they reside, and are unable to purchase a home through obtaining a traditional mortgage.
How Do I Qualify?
If you are interested in obtaining a rural development loan for the purchase of a home through the USDA, there are a few requirements. These are as follows:
- First, you must be considered a permanent resident of the United States and/or be a citizen of the country.
- The income source that you report during the application process must be considered dependable. That is, you must have had that source of income for at least two years, continuously.
- Your credit history must be considered “acceptable”. This means that you should have had no collection reports in the past year or other credit complications. Extenuating circumstances that has resulted in financial hardship and negatively impacted your credit will be considered. For example, if you suffered any type of medical emergency and it impacted your financial livelihood, there is a possibility that you still may be approved for this type of loan.
- If your credit score is at least 640, the processing of your loan will go quicker. If it is lower than this, you will be expected to meet the standards as outlined in the underwriting of the loan.
- If you have no credit history or it is considered to be “limited”, you will be required to list credit references that are beyond the scope of what is considered to be “traditional”. For example, those obtained from landlords/property managers and/or utility companies that provide gas and/or electricity to you.
How Can I Get Started?
Once you have determined that you are able to meet the qualifications for the USDA rural development loan that you seek, you may contact us here at Somerville Bank to get started on the application process. If you are unable to gather all of the information, you may contact one of our loan specialists for assistance. Many mistakenly believe that these loans are only designed for farmers.
We would like to outline that your occupation is not a determining factor in the approval process, only your income from your occupation.
If you have a desire to learn more about building site lot loans and want to start the application process, you may visit us at one of our 7 locations.
These include our Ohio Locations: North Eaton, South Eaton, Somerville, Camden, Oxford, Hamilton, and the Mortgage Center in Richmond Indiana.
For more information, simply contact one of our friendly staff and we will be more than happy to assist you.