USDA Rural Development Loans: Pros and Cons To Know
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- เผยแพร่เมื่อ 12 พ.ค. 2024
- USDA Rural Development Loan Pros and Cons. Have questions about the USDA Loan? Call Us - 337.476.2623 or visit bayou-mortgage.com/home-buyer... to check your eligiblity.
USDA Loans open the door to homeownership with zero down payment, offering competitive interest rates and flexible terms. Backed by the federal government, these loans present an attractive option for many. However, there are some restrictions such as income limitations and property location requirements.
In this video you'll learn how to qualify for a USDA loan and USDA loan requirements.
In this video, we break down everything you need to know about USDA loans in 2023:
00:00 Introduction
00:30 Overview of USDA Rural Development Loan Program
01:00 Pros of USDA Loans
05:15 Cons of USDA Loans
09:25 Are USDA loans a good fit for you?
✅ Bookmark the video timestamps to navigate directly to the sections that interest you!
#USDALoan #HomeBuying #RealEstate #Mortgage #USDAHomeLoan #NoDownPayment #RuralDevelopmentLoan
USDA Loan Blogs
USDA Rural Development Loan In Lousiana: bayou-mortgage.com/usda-rural...
Pros and Cons of USDA Loans: bayou-mortgage.com/pros-and-c...
How To Apply For A USDA Loan: bayou-mortgage.com/usda-rural...
Watch These USDA Videos Next:
USDA Loan Closing Costs: • USDA Loan Closing Cost...
USDA Loan Complete Guide: • USDA Rural Development...
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Channing Moore
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791 Bayou Pines East Unit 5
Lake Charles, LA 70601
All pros I’m trying to be way out in the sticks bud
Heard That!
@Homesteading7 how is it going for you?
Thank you for the information! Great video!!
Thank you and thanks for the sub!
Great information. Thanks for sharing your knowledge.
Glad it was helpful!
Great video - thanks! One good point to mention is you can buy or build. Well-spoken and helpful to all, thanks!
Plan to do a full breakdown of USDA’s One time Close product since they are so rare
You are a great guy to keep up with your viewer's questions. 😊
I appreciate that!
Appreciate this video. Thanks.
Closed with a usda, on time, on a new build..which apparently is hard to do lol
Thanks for your input! I’m considering a USDA loan for my new home.
❤️
I just closed on a house with the USDA Rural Development loan....they are actually writing me a check for $500 at closing. They owe me money, haha.
That’s awesome congratulations 🎊
Wtff nicee
thank you for sharing this information, I appreciate you!
You are so welcome!
Great info im in Florida looking to buy in Lakeland
If you’d like a referral to a broker in Florida let me know! Hope to be licensed there next year.
Thank for the great content Channing. How do they determine the Monthly Mortgage payments?
Your mortgage payment is determine by your loan amount, interest rate, cost of Insurance and Taxes.
My wife and I are pulling up stakes and moving out of Commiefornia, and moving soon to Idaho. This loan opportunity is really going to help because we initially want to find a home outside the city limits, in a more rural area, we fell in love with Idaho Falls, and the surrounding area. Thanks for the video, it really has inspired us.
You are welcome. Enjoy Idaho🎉
When can you sell the house is their a limit on how many years u can own the home before u sell ?
So much about income limits. With a good credit score, no debts, but only SS income, I´ve been told by local agent that my income is insufficient for any USDA loan. I am in a conundrum of needing safe housing (elderly, disabled) yet stuck in place.
I feel for you and know that must be frustrating. I would highly recommend looking into the USDA Direct program at your local USDA office. They make loans for people with very low incomes at much better rates than any lender could ever offer. The process is slower than what we can do but versus no options at all I think it's better. USDA Guaranteed Limits your housing payment to 29% of gross income so with SSI it would be tough. Direct is the way to go in this situation. Hope this helps!
@@bayoumortgage thanks for replying....that is precisely what I did...applied for direct loan. No go. income not sufficient. So when I read ¨very low income¨ it appears that I am in low, low low scale.
That sounds like our situation, probably. Good luck to you. Make sure you check into all low-income senior programs in your state.
Love the videos! Question, if I’m under the income threshold with my salary but receive a bonus every year that takes me over the limit, am I not eligible? Or do I just use the salary to qualify?
Your bonus will be factored into whether you meet the income limit. The lender will be required to take either your current ytd pay divided monthly then x by 12. If that puts you over the limit then you will not qualify. I have a video coming out in about 30min the limits increased this year so you might be under now.
Can you buy a primary residence with a USDA loan and later buy a second property with a conventional loan while still paying on the USDA? Do they count other assets against you?
If you purchased the first home with usda as a primary residence yes you could. You just need to live in the home for 12 months I believe
Great video!
Glad you enjoyed it
HA......I'm Working With Them Now And The Game Is Changing Up
?
@@bayoumortgage Never Mind About The Last Comment. What I Mean Is Commenting on What You Said In Your Video. I'm In Process With USDA And Boy It's A Whole Lot Make Them They Say Or Want to Tell up front.... Anyway thanks for responding back
If you are living in a home you obtained through a USDA loan, can you buy another home about 5 years down the road using a conventional loan? Or will that cause a problem with the USDA loan?
Yes for sure. As long as you can swing both payments in your debt to income or sell it.
Is this Program available with an itin number or it is just for people with Social security number?
Do you have a video that addresses the build option with USDA guaranteed or direct
yes, i've been searching for this!
Sounds like I need to make one. I don’t currently offer this product but they do exist.
Navy Federal doesn't have PMI.
Can you use this loan to build a house on land you already own? Or use the loan to buy land and put a manufactured home on it?
You would need to use the USDA One Time Close Construction Loan for this. They can be hard to find
I was planning on getting my usda direct loan for very low income. I cleared up my credit report (4 credit cards) In 1 week and now I was told I have to wait another year. However it was explained to me, that its possible to not have to wait .usda direct loan for low income. Very low income. What should I do now?
I don't know much about the USDA direct program because lender can't offer it. I know it's very manual and susceptible to USDA discretion.
If you do not live near a rural area, and would need to change jobs to relocate into an area that's eligible for a RD loan, would they honor your 2+ years of continuous employment at your current employer before you relocate to the new area you are buying your house in?
You would need 30 full days of paystubs from the new job assuming it was in the same line of work and you didn’t need to rely on overtime to qualify.
Mrs. Rhonda can you refer me to someone that knows about the USDA loans in Pennsylvania
If you still need help I can
Can you use this loan to buy land purchase modular home all in one loan?
You would need a one time close construction loan to do that. They are fairly difficult to find because they are a tough loan.
would like to buy a rural home with a few acres- any issues with this idea did the prequalification - i have a major issue that I would like to discuss privately. Is there a separate email I can use thanks Joe
Hey Joe, channing@bayou-mortgage.com
Is this like FHA you can only get so much land or can I get like 20 acres if I go through this place with a house
It’s like fha and the amount of land is restricted
we are a family of 4 living in NC Raleigh. total annual income is less than 80k, will we qualify for this loan? can I buy a land and construct a house using this money? will they give it as a lump sum or in installments? can i buy an existing 20 yr old house which is in the town limits? thanks
Nothing inside the city limits. USDA has a map you can look at to see what areas are eligible in your area. USDA does have a construction loan but they are hard to find.
What happens if you are approved for the loan and at the time you make a household income of less than 103K a year but down the line your income increases to 120k
If it happens before your loan closes you no longer qualify. If it's after you've already closed on the loan no big deal.
Can I buy a USDA 515 multi-family complex as a non-US resident / citizen real estate investor?
I am not familiar with that program.
No
You didn’t mention what the cons are if you decide to sell your home
If you decide to sell your home and it has a usda loan?
Does usda loans affect for future loans for investors?
I am not sure what you mean. You can't use a USDA loan to purchase an investment.
How LONG are these mortgages tho?? 15, 20, 30, 40yrs?
Typically 30 years
In Texas the limit is $129,400 for a family of 4
Are located in Kendall County? You can view the income limits directly from USDA here www.rd.usda.gov/sites/default/files/rd-grhlimitmap.pdf. A family of 4 would have an income limit of $103500 UNLESS you are in one of the few areas with a higher limit. Austin is $126850, DFW is 112000, and Midland is $122,500. Kendall County is $129400.
It is by county. Check the 1 you live in.
This is my situation it’s just two of us with my only Income last year was 43k this year 34k, I’m in the outskirts of (Los Angeles lowest house in qualifying areas is 400k )
But I have somewhat of a good Down or backup money I have good credit not much debt .. would i qualify?
I think you are going to be well over the debt to income requirements for the program based on the numbers you put here
When can you rent the home obtained by a USDA loan? After 12 months?
Typically yes
I work on a single income in the range of 52-56k, which is still under the income restriction for a USDA loan. My credit score is 748. Would I qualify for this? I am not able to come up with down payment money so am seriously looking into a USDA loan as I live pretty close to a rural area already.
Absoulelty and it would be a great loan program as well! You just need to look out for DTI and make sure you stay close to 41%.
@@bayoumortgage My DTI is well below that because I don’t really have debt at all, lol.
@@bayoumortgage and thanks for the prompt response.
@@Sailormars13 that’s awesome and good job!
Did you try and apply yet? Their current interest rate is 4% and they have an eligibility map so you can see areas that qualify.
Can you apply for a USDA while still having a regular mortgage. (I bought a house with my brother and looking to love out but don’t want him to sell the house or refinance it)
You potentially can but there are various factors that would go into it. Are you on the loan? How far away are you moving etc.
What if you currently qualify but you get a better job eventually and make above the limit? Do they revoke the loan? How does that work?
Great question! I hope someone will answer
@@flippedoutmom if it’s after you have already closed the deal then doesn’t matter but if your income goes up before the close then you no longer qualify hope that helps
Once you have the mortgage what you earn each year does not matter. It’s only a matter of qualifying to get the loan.
What if i decide to put a downpayment on the USDA loan? will that work to get higher value house?
And is there a time limit if decide to sell the house? or maybe rent the house and buy another home?
You can’t put a down payment down on usda they don’t allow it. If you have a down payment probably better to go FHA which allows for a higher debt to income ratio. And you typically need to be there for 12 months before you can move
Does this loan work for US territories like Guam or American Samoa?
I don’t think so
Can the loan be used to buy the land too? Or is it just for the house?
USDA Rural Development is only for land with a home on it. Mobile home Single-family etc.
@@bayoumortgage - I finally got approved for a Direct Loan and they said mobile homes they only accept brand new while the regular homes could be used or new. And yesterday I just put my first offer on 1 mobile hopefully it’s being accepted. Don’t know yet
@@candelariab2887 That is great news! I will be praying you receive a ffavorable outcome
@@bayoumortgage - thank you! I hope so too
@@candelariab2887how's it going now?
Why don't they allow the homebuyer to make income out of the property while Living there or can you?
USDA does not allow the purchase of multi-family homes. Since the program is designed for rural borrowers looking to purchase a primary residence. FHA does allow you to purchase up to a 4- unit property as long as you reside in one of them for at least 12 months
@@bayoumortgage what I mean is the real SAID'S you can not use the property any type of income purpose. I way I'm looking at it is I'm going to live there but thinking about selling cookies for income ....will or is that allowed? Just using this as a example
@@ladyofchange2386 I think you can sell some cookies. The rule is that the property itself cannot be currently in use in a way that generates income from the property. So like a farm, or it currently has an apartment or second building etc. What you do in the property is your business. And what you do with the property once financing is secured is also your business.
Will it work for land and building a home?
There are usda construction loans they are different but are offered
You would need a construction loan for this. USDA Construction loans are out there but hard to find
I have an annual income of 28k from social security but excellent credit score. Will I qualify? I cant find anywhere that lists a minimum annual income.
With that income, I would recommend looking into the USDA Direct program. You go directly thorough the USDA and it's for lower income clients. Here's a video I did on that one. th-cam.com/video/5adVY6PG4qY/w-d-xo.html
Thanks. Thats actually the program I meant. Do you know if they have minimum income requirements?
Is it taxable gross income or income in general?
Income that isn't taxable cannot be used to qualify for a mortgage. However if you have regular deposits into your account they will likely be flagged and included in your income for USDA income limit purposes.
@@bayoumortgage what I mean is money that goes to 401k and other benefits isn’t taxed. So if you look at my w2 from last year my taxable income shown is about 12k less than if you added up my total gross on each paycheck prior to benefits. So which do they use?
@@jamesgunn5358 For USDA's income limit that will view current YTD paystubs and divde out to a monthly number before deductions so your true gross income. If you flip into next year your gross income from your w2 will be used. Same for qualifying as well
@@bayoumortgage thanks!
Can I still choose to put a 20% down payment on this loan?
Not with USDA, however you can do 20% down with a conventional loan.
@@bayoumortgage Thank you!
Just make sure you meet the income requirements, have a good credit score and a good credit history before you even apply. They will look for any little thing to deny you for this loan and from my experience the process is a nightmare.
Ana sorry to hear you had a tough time. Unfortunately many loan officers aren’t familiar with USDA and that tends to make all the difference
If your denied once can you try again later?
@@lls1142 yes. I had to wait 6 months to apply again but that might just be my local office.
Not to mention the subsidy repayment and foreclosure clauses plus making more than what you fall under. Missing some cons here
Does raw land qualify for this loan?
It would not. Usda is for the purchase of a primary residence
If I try to go the USDA LOAN route can I purchase a piece of land?
USDA doesn’t have a land loan program that I am aware of. They do have a construction loan program that may allow this if you are building
If a retired couple, both on Social Security, apply, but wife has high debt-to-income ratio, husband has very low, and both get the nearly the same amount in Social Security, how is the wife's credit score figured into the application? It is perfect except for the ratio. We'd like house in husband's name anyway because of state's recovery program for medicaid. Wife is disabled after brain bleed.
It will depend on if you are located in a community property state or not. You have 1 or two options. Apply together (community property states) or apply on your own. If you go solo you cannot use her income or anything in applying. I would also suggest if you are lower income that you check out usda direct which I also have a video on
They are giving me 7.1% for 250k how can o bring that down in VA
That is quite high. I would suggest working with a mortgage broker not a retail bank
How do I find out it’s a rule area? And how can I get someone to help me?
Check out this website: eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do;jsessionid=SfgQiBmpX3eafqVw-Nl-8Yfg
PMI is a con to funnel income to the lending institution. It is redundant vs the Gov guarantee.
PMI on government loans funds the program so that they can offer the “government guarantee”
No down payment,....except if you have more than 15K in bank accounts.
The rule is that if you can pay 20% down of the purchase price from your checking or savings account plus cover closing costs you are ineligible for the program.
@@bayoumortgageso can one withdraw cash? Or invest the cash then apply?
Also what if one already owns a home?
@@SimonPhoenix313 lender will look back on all transactions for the last 60 days.
He is lying, that is not true, you do need a down payment
You DO NOT Need a down payment on a USDA Loan. It's 100% financing.
Direct direct direct