Perhaps the hustle and bustle of the big city isn’t for you.
When you think of San Diego, you instead want wide, open spaces out in the more rural areas.
Somewhere a bit more natural.
If that’s the case, and you have your eye on a rural gem in San Diego County, a USDA loan may be right for you.
USDA stands for the U.S Department of Agriculture, and the USDA loan is their specialized mortgage program that doesn’t tend to be widely known.
The USDA loan came about in 2014 or so, when the USDA invested near $20 billion dollars as part of its Rural Development program.
The program was designated to help stimulate the economy and quality of life in rural America.
Given its low interest rates and that it require no down payments, the USDA loan is absolutely perfect for someone who is looking for a rural home.
Have your eye on that vintage home out in the country parts of San Diego County?
Stay tuned to see if a USDA loan is right for you.
The USDA guarantees a mortgage that is issued by a local, participating lender, as well as like FHA and VA backed loans.
USDA loans allow you to lock in on low mortgage rates, even without a down payment.
(Please note: if you put little or no money down, you will have to pay a mortgage insurance premium – again, much like an FHA loan.)
Direct USDA loans are for low and very low-income applicants.
Income thresholds vary by region, so make certain you check to see what you qualify for.
Being a local mortgage broker myself, you can feel free to ask me if you aren’t sure.
With subsidies, interest rates can be as low as 1%.
Home improvement loans and grants are fairly self-explanatory.
These loans, or outright financial awards, give homeowners assistance in repairing or upgrading their homes.
These packages can fortunately combine a loan and a grant, meaning borrowers in need of assistance repairing their homes can receive up to $27,500 in assistance.
How do you qualify?
It is important to check the income limits for the area and county where you live in, as income limits vary by location.
You can find all the information you need here.
Please note: USDA guaranteed home loans can only fund owner-occupied primary residences. Other qualifications are listed below.
U.S Citizenship (or permanent residency)
A monthly payment, which includes principal, interest, insurance, taxes, that is 29% or less of your monthly income. Other monthly debts cannot exceed 41% of your income. If you have a credit score above 660 however, the USDA will consider higher debt ratios.
Dependable income for at least a minimum of twenty-four months (typically)
An acceptable credit history. No accounts can have been converted to collections within the last 12 months. Other criteria apply, so be sure and check with your lender. If you have circumstances that affected your credit that were outside of your control, such as a medical emergency, you may still qualify however.
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Applicants that have credit scores of 620 or higher will typically receive more streamlined processing, while those with scores below 580 will need to meet more stringent underwriting standards.
Borrowers without a credit score can qualify with “nontraditional” credit references e.g. rental and utility payment histories.
USDA loans also tend to issue mortgages to those deemed in the greatest need.
This can mean: individuals without “decent, safe and sanitary housing”, borrowers that have been unable to secure a home loan from traditional sources, and those that have an adjusted income that is at or below the low-income limit for the areas in which they reside.
Typically, the USDA issues direct loans for homes of 1,800 square feet or less and that also have a market value below the area loan limit.
This can vary wildly by location, though a loan limit of $216,840 is typical across the United States.
It’s important to note that metropolitan areas are generally excluded from USDA programs, as they are aimed largely at rural areas, but some pockets can exist in suburbs.
Again, it helps to go over your options, which I am happy to help with.
USDA loans can be a fantastic way for those who want a rural home to find a mortgage with great interest rates, little to no down payment and generally excellent conditions that were designed to benefit the borrower – especially those in need.
If you have been denied mortgages from traditional lenders or by traditional means, you can always check out the options you may have with a USDA participating lender – I’m happy to answer any questions you might have.
They might be able to give you more options than you had thought were possible in whatever situation you currently find yourself in.
It’s always a good idea to shop around, know your options and educate yourself – that is part of the reason I am here.
Even if you don’t intend to become a farmer or rancher out in the rural plains of California, or anywhere else in the United States, the USDA loan offerings can still be of great service.
The services that USDA-backed loans provided by participating lenders are based entirely on location and income, by and large, so don’t be afraid to venture out into the country and find yourself a real gem.
What do you think?
Are you hankering for a rural home?
Somewhere out of the hustle and bustle of the big city, where you can live close to nature?
Maybe you’ve got your eye on that vintage farmhouse out in the country – if it’s rural, a USDA loan may just get you moved in.
Let me know.
Leave a message in the comments section below - or call or text me at (760) 297-4539
Your USDA Loans Insider,
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