USDA just published new household income limits for the 502 Guaranteed Loan program. The newly increased income limits will be in place for the remaining part of 2023, and into most of 2024.
(NOTE: please see the new update here regarding USDA 2024 income limits)
The USDA loan program has two critical components to determine a homebuyer’s eligibility. The first component is the actual location of the property as it must be located in an approved USDA “rural” location. Buyers can learn more about the USDA map and how to search for USDA houses for sale. The second component is the income of the household as it must fall below a certain limit.
Income limits for standard households of 1-4 members are currently set at $110,650 for most locations around the U.S. For larger households with 5+ members, the income limits increase to $146,050. Again, these limits are based on most standard locations.
More expensive, or “high-cost” housing locations especially California, Fla, CO, VA, etc may permit income limits much higher. Buyers can look up their income limits by using the USDA income calculator here.
Homebuyers should remember a few things as it relates to USDA Rural Housing income eligibility:
- Gross income will be used.
- The income of ALL members of the household will be used when determining eligibility. This includes members even if they are NOT listed on the actual loan application. Example: If you have a teenager who works a part-time job, their income will need to be included. Or an elderly parent who receives social security each month. As for household members listed on the loan application, only their income will be used for actual loan qualifying. Remember, income to determine household eligibility and loan qualifying are two different things…
- USDA allows many different deductions for childcare expenses, dependents, elderly care, disabled borrowers, etc. Speak with us about all the deductions if you find your income is over the limit.
USDA Rural Development loans still offer many key advantages for homebuyers today:
- No Down Payment is needed. USDA is still 100 percent financing for borrowers that meet the eligibility and qualifying guidelines.
- Buyers can include their closing costs in their mortgage or have the home seller pay.
- Low fixed interest rates.
- Low monthly mortgage insurance costs (PMI) when compared to FHA loans, or low down payment conventional mortgages.
- Most single-family homes are eligible for financing assuming the property is in decent condition and located in a USDA-approved zone.
- Buyers can move/sell their home anytime without penalty.
Interested applicants can learn more about USDA Loan Eligibility here.
To learn more on how to apply, please call us or just submit the Quick Contact Form on this page. We are proud to assist home buyers nationwide.