The Tennessee USDA home loan program is intended to provide moderate-income homeowners with 100 percent financing – no down payment. United States Department of Agriculture loans, also known as Rural Housing or Rural Development, are available to approved buyers in almost every county in TN. This government-backed mortgage program offers some great perks, especially for first-time home buyers. Let’s look at the Tennessee USDA loan details below.
Tennessee USDA Loan Details:
There are a variety of requirements to qualify for Tennessee USDA Loans:
- Monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income (34% ratio)
- 100% financing, the home seller is also allowed to pay home buyers closing costs.
- Credit background will be fairly considered. At least a 620 FICO credit score is required to obtain USDA approval through most lenders and banks.
- Tennessee home buyers must have enough income to pay their housing costs plus all additional monthly debt (41% ratio with some flexibility depending on credit, etc).
- Income can be up to 115% of the median income for the area.
- Past financial hardships like Bankruptcy: Have been discharged from a Chapter 7 bankruptcy for three years or more (if applicable).
- Tennessee property must be considered rural, which is generally defined as locations with rural characteristics. Most single family homes are eligible as long as they are located in an USDA approved zone. USDA 502 Guaranteed loans can be made on either new or existing homes. Contact us by calling ph: 800-743-7556 to learn about the approved locations in your area, you may be surprised. Existing homes must be structurally sound, functionally adequate, and in good repair; There are no restrictions on the size or design of the home financed. Additionally, the property must not be used for “income-producing” purposes. Mobile homes are not permitted.
Additional USDA Benefits:
- There are no set USDA mortgage loan limits, however your debt ratio generally needs to be within program guidelines, which combined with the income limits would effectively put a cap on the loan amount you qualify for.
- USDA mortgages do require a little monthly mortgage insurance, but it is much lower than FHA and Conventional mortgage options.
- You are not required to be a first-time home buyer.
- Flexible refinance options available to USDA homeowners should interest rates decrease later.
TN home buyers that have questions or what to learn more about getting pre-approved can submit the Quick Contact Form on this page. You can also call ph: 800-743-7556 USDA Mortgage Hub is one of the nation’s leading Rural Housing loan specialists, we are available to serve you 7 days a week.
Servicing all TN: Memphis, Nashville, Knoxville, Chattanooga, Clarksville, Murfreesboro, Jackson, Franklin, Johnson City, Bartlett, Maryville, Bristol, Lebanon, Mount Juliet, East Ridge, Farragut, Shelbyville, Tullahoma, Dyersburg, Dyersburg, Springfield, Goodlettsville, Greeneville, Sevierville, Dickson, Elizabethton, Middle Valley, McMinnville, Athens, Soddy-Daisy, Lakeland, Hendersonville, Kingsport, Collierville, Cleveland, Smyrna, Germantown, Brentwood, Columbia, La Vergne, Gallatin, Cookeville, Oak Ridge, Morristown, Spring Hill.