Applying For A USDA Loan In Texas? Here’s A Perfect Guide For You
Income Limits For USDA Loans
For the loan guarantee, a maximum adjusted annual income amount is set by the USDA. This is a limit to prevent anyone outside of the low to the moderate-income bracket from being a recipient of the loan.
- A household with 1-4 members: $90,300
- A household with 5-8 members: $119,200
There are regional differences that must be accounted for, and the USDA deals with these differences by using household sizes and locations to make limited variations. 115% of the median household income of an area is the base limit that the USDA sets on income. To determine if you’re eligible, they’ll compare the regional median to your qualifying income.
USDA Repayment Income
For the USDA, repayment income and qualifying income carry huge differences. Repayment income shows the ability of a borrower to pay back the loan, which is different from the ability for income requirements to be met by borrowers.
A DTI, or debt to income ratio is used by lenders to figure out just how creditworthy an applicant really is at the time of the application process. USDA loans have a 41% DTI standard. This means that 41% is the maximum amount of a monthly income that can be spent on debts by a borrower.
Although 41% is the standard, a USDA loan can be obtained with a higher DTI. The lending requirements will generally be tougher when applying with a DTI higher than 41%. Each lender has their own guidelines related to this.
Location Requirements For USDA Loans
Homes in rural areas are where USDA loans are intended to be used. The term rural can encompass many locations, and suburbs can often fit the USDA’s definition in many cases.
An open country that is away from an urban area is considered to be a rural area by the USDA. Depending on the area, a maximum population of 35,000 may be required for the designation of rural.
Nearly all of the land available in the U.S is eligible to receive a loan for rural development because of the USDA definition, with 100 million people living across the land.
Any income producing property can’t be purchased with the help of a USDA loan. There is a loophole to this, as properties that aren’t being used for commercial purposes anymore can still be purchased. This includes silos, barns, livestock facilities, and greenhouses.
Properties that can also be eligible:
- Newly constructed properties
- Modular and manufactured homes
- Townhouses and condos
- Homes that have been foreclosed and subjected to short sales
Thousands of people have benefited from the loan program available from the USDA, and for anyone who wants to become a homeowner, it stands as one of the top options.
In The State Of Texas, Get Your USDA Loan By Going With The Texas Mortgage Pros
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