USDA Rural Development published the newly increased income limits for the USDA Guaranteed Rural Housing loan program. The updated income limits started in July 2019 and will carry into 2020. This is great as more home buyers will now be eligible for the 100% financing options that USDA loans provide.
New Income Limits as of 7/22/19 for most locations are listed below. Check USDA’s eligibility website at https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do to check limits for your area. Note, some higher-cost locations do have higher income limits. Some important notes to keep in mind:
- Remember that USDA permits certain eligible household income deductions for each minor and also documented childcare expenses, disabilities, etc.
- USDA housing income limits apply to the entire household, this means any household member that is over 18 and generates income (even if they are not listed on the loan application)
|New Income Limits as of July 2019||Previous Income Limits|
|1-4 Household Members||5-8 Household Members||1-4||5-8|
USDA RD loans still offer select benefits for eligible homebuyers, let’s recap a few below:
- 100% financing
- Reduced mortgage insurance costs (compared to FHA and Conventional loans)
- Sellers concessions are permitted for closing costs
- Secure 30 year fix rate, with no early payoff or recapture penalty
- Any eligible and approved homebuyer can take advantage of USDA home financing, not just first-time buyers
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