Rural Housing / USDA made some recent adjustments to the allowable household income limits. The new 2019 USDA rural housing income changes will stay in effect through 2019 and open up the program eligibility to even more home buyers. For buyers that don’t already know, the USDA housing program will allow approved borrowers secure home financing up to 100% with no down payment needed.
NEW UPDATE: Please read about the newly released 2019 USDA income limits here.
However, the program has a few important requirements in the way of “eligibility” First, the house has to be located in a rural defined location. The good news is many locations we wouldn’t think as “rural” are still approved areas. Home buyers can learn more about searching for USDA houses for sale here.
The second main requirement is the gross income amount of the family. There is a limit to this, which will depend on the property location, family size and the number of dependents. USDA Rural Development loans are geared more towards lower/moderate income households. In most lower costs states, the 502 Guaranteed housing income cap for a standard family of 1-4 is $78,250. Higher costs states like California, Florida, Colorado, etc will have limits about 10-20K per year higher. For families of 5+ members, the limits increase to over $100,000, and in some cases like Alaska over $200,000 per year. Buyer can check their locations USDA income caps here.
Loan applicants will want to remember a few things in regards to the income restrictions:
- The income limits are based on the borrower(s) current GROSS income. Future income after loan closing is not relevant.
- These income caps apply to every member of the family that makes income – even if they are NOT applying for the loan.
- Family with children or other dependents can take certain deductions.
- Borrowers can look at the link above for their area income limit, or use the handy USDA income calculator here. Pay attention to the listed limits for “Section 502 Guaranteed Rural Housing Loan Program”
In addition to the eligibility requirements listed above, USDA also has loan qualifying parmeters that must be met:
- The borrower will want to ensure they have a min 620 credit score
- All the qualifying income used on the loan application must be documented, borrowers should have a stable job history. These requirements are pretty much the same as other government-backed mortgages like FHA or VA
- The program can only be used to purchase homes that will be owner-occupied. Investors are not permitted.
USDA offers many advantages especially to first time home buyers just starting out. Zero down payment, seller paid closing costs permitted, secure fix interest rates and backed by the U.S. gov.
Applicants can learn more about all the advantages by viewing the USDA Loan Eligibility page above. Contact us 7 days a week to learn more – just call the number above or submit the Quick Contact form on this page.