Almost all of us know the benefits of rural home loans. And for that reason, a lot of people are trying to opt for it. Right now, you can consider it to be the best housing loan in the land of the U.S
Here, we are going to converse some of the facts that every borrower should know. So, these are some of the facts about USDA home loans.
Most of the U.S. are eligible for this loan
Well, we all know that USDA loans are only applicable to the rural areas. But you will be shocked after acknowledging the definition of the term ‘rural’ by the USDA. Well, according to their guidelines, any place less than 35000 of the population is considered as the rural area. So, you can acknowledge the fact that almost 97% of the U.S. is eligible for the USDA loans. For instance, if you are living in Virginia, you are eligible for the USDA Home Loans in Virginia.
Only primary residences are eligible for the loan
If you are looking for a second home, you cannot avail the USDA loans. It will only serve your purpose if you are opting for a primary residence. The essential requirement for the USDA is the primary residence where you will stay for the rest of your life.
There are numerous types of eligible properties
Well, varieties of property are eligible for the USDA home loans. Maybe, you think that it will only cover the houses that are relatable to the rural areas. But the fact is, it will help you to build any dwelling that you are interested in. From existing single-family homes to new constructions, it will take care of all.
Maybe your income is too much for USDA home loans
You have to understand that USDA is not compatible with every budget. While evaluating your eligibility, the USDA will consider your income. If you are making more than the 115% of the median income of the area, you are not eligible for the loan. However, the cost of your living will vary depending on the place you are living in.
You can also avail the loan if you are bankrupt
It is good news for numerous people. Yes, you can opt for this loan even if you are bankrupt. Well, if you are going through a hard time regarding your finance, you don’t have to worry about the USDA home loan. You will get three years of the waiting period after your bankruptcy. After that, you will be considered eligible for the USDA home loans.
The credit guidelines are pretty flexible
There is no minimum credit score if you want to avail this loan. However, if you are the borrower, your credit score must be at least 640. This number is significant due to USDA’s Guaranteed Underwriting System (GUS). Well, it was crafted to systematize the process of evaluation of the credit list. To be precise, the lender will require the score of 640 so that he or she can underwrite the loan, manually.
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