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Has anyone ever used an USDA guaranteed loan? I would like to know your experience.
Also, I can't find the income eligibility requirements for Orange County. I found Durham's which is $57,400. I’m hoping Orange County’s isn’t much lower. Are there any advantages to this loan for someone who makes a median income with good credit? Are the interest rates usually lower than if you were to go with a typical lender and have good scores? It also says to qualify you have to be without adequate housing. What the heck does that actually mean? If you are homeless or living in a shelter? I don’t understand how you can make almost $60,000 and year, have good credit, and not have adequate housing? (Yes, I know there are people who had great incomes and have fallen on bad times. Not talking about them. I am talking about people who currently make pretty good money and can easily afford “adequate” housing).
Sorry, I am confused as I have just started looking into this. Any info would be great, thanks!
First off, one has to do whatever is best for themselves when it comes to housing. I wouldn't blame anyone for taking advantage of any program in the Triangle that would help them obtain their dream, as long as they can afford it. Having said that, I hope this loan program is not another ridiculous attempt by the government to force home ownership onto people. Don't we have enough problems after what the government has already done to us?
I used the USDA loan when I purchased my home in Wake Forest - it's for rural areas, but rural is very loosely interpreted, as my home is in Wake Forest's historic district - so not farm country!
You don't have to be homeless or in a shelter - I was very comfortably ensconced! PM if you'd like info for my mortgage person - knowledge of the program is key. How good of a deal is it? It really depends on your alternatives - for me, it made the most sense.
This program has been around for a long time, like FHA and VA... and is in fact very similiar to them.
Like VA, it is 100% financing and has no monthly mortgage insurance. It has an upfront mortgage insurance fee (like VA/FHA) which is financed into the loan. Credit score requirements are relaxed but debt/income and reserves are the focus of the program.
There are maximum income limits and property location limits. The amount of income you can make depends on the # of people in the household. $57,400 is for 1 person I think in that county, if you have a couple or a ousehold of 4 the income limit is higher.
The property does need to be "rural", but it is NOT a farm program. It is for single family residences, townhomes, condos, etc for residential use only. Basicaly "rural" means it has to be outside of major metro areas. I am not as familiar with the Durham/Orange County Limits.... but in Wake County anything south of 10-10 road (all of Holly Springs, Fuquay Varina, Angier, etc) and on the Northern end (Wake Forest) is considered rural.
Credit scores are relaxed, a 600 score is considered a minimum by most lenders... 620 is preferred. The guidelines focus on stable employment history, low debt/income ratio, assets (for emergencies) rather than credit.
Typically, if you have good credit and 3-5% down the rates on USDA are HIGHER than conforming loans. They are also higher than FHA/VA loans in most cases. This is reasonable because of the added risk of 100% financing versus FHA with 3.5% down.
The main benefit of USDA is that its one of the few programs left with 100% financing and there is no monthly mortgage insurance. Of course there is the 2% upfront fee that is financed into the loan, which is very expensive unless you stay in the home for a long time.
Government loan programs are also better for those with lower scores (620-680) because FHA/VA/USDA has no penalty to interest rate or mortgage insurance based on credit score, unlike conforming loans. With credit <680-700 conforming loans become expensive rather quickly.
This program has been around for a long time, like FHA and VA... and is in fact very similiar to them.
Like VA, it is 100% financing and has no monthly mortgage insurance. It has an upfront mortgage insurance fee (like VA/FHA) which is financed into the loan. Credit score requirements are relaxed but debt/income and reserves are the focus of the program.
There are maximum income limits and property location limits. The amount of income you can make depends on the # of people in the household. $57,400 is for 1 person I think in that county, if you have a couple or a ousehold of 4 the income limit is higher.
The property does need to be "rural", but it is NOT a farm program. It is for single family residences, townhomes, condos, etc for residential use only. Basicaly "rural" means it has to be outside of major metro areas. I am not as familiar with the Durham/Orange County Limits.... but in Wake County anything south of 10-10 road (all of Holly Springs, Fuquay Varina, Angier, etc) and on the Northern end (Wake Forest) is considered rural.
Credit scores are relaxed, a 600 score is considered a minimum by most lenders... 620 is preferred. The guidelines focus on stable employment history, low debt/income ratio, assets (for emergencies) rather than credit.
Typically, if you have good credit and 3-5% down the rates on USDA are HIGHER than conforming loans. They are also higher than FHA/VA loans in most cases. This is reasonable because of the added risk of 100% financing versus FHA with 3.5% down.
The main benefit of USDA is that its one of the few programs left with 100% financing and there is no monthly mortgage insurance. Of course there is the 2% upfront fee that is financed into the loan, which is very expensive unless you stay in the home for a long time.
Government loan programs are also better for those with lower scores (620-680) because FHA/VA/USDA has no penalty to interest rate or mortgage insurance based on credit score, unlike conforming loans. With credit <680-700 conforming loans become expensive rather quickly.
Thanks for the info. Doesn’t sound like it's right for my bf, who is buying his first house. Sounds like conventional is the best way to go since he qualifies fine for that. Although, Sprint did some shady stuff recently as I have posted yesterday: Frustrated! Hopefully lenders will understand.
I wasn't sure if it would be a better deal or not; doesn't sound like it is. My bf has no debt and has been at his job for over 3 years. His first house isn't going to be long term as I just read about the whole tax thing. I figured it was primarily there to help those who need it. Just trying to find the best deal!
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