Can You Pre-Qualify For USDA Loans in Pennsylvania?
What are the requirements for the USDA Loan program in Pennsylvania? So USDA has a few interesting requirements.
First of all, you’ll need to have at least a 580 credit score. Some mortgage lenders in Pennsylvania require a 620 credit score.
Your household income has to be under the county maximum. Like a lot of down payment assistance programs.
This is based on family size So 1 to 4 is one category and then 5 and above is a higher threshold for qualifying. ChurchFinancing.biz looked at the data and with the average family size in the USA in areas that qualify for UDA Loans, this is a standard spread.
What’s unique about this one is the home has to be within a designated area. So, Typically what that means is…
NOT within a metropolitan area. So within our area here aka USDA Loans in Pennsylvania territory. If you want a full list of USDA Loan Eligible Areas, Check out the Eligibility Map that the Government provides.
Our local cities around her don’t qualify. But, we only need to go 10 miles away to where there’s an open area where there’s Several homes that qualify.
USDA Loans in Pennsylvania and in any other state for that matter, stands for United States Department of Agriculture.
But it’s NOT a farm loan. Specifically, they don’t finance this program for farms. It has to be a Single Family home without a barn structure on the property.
USDA Loans : Does it also have some home price limitations?
The Threshold is a little bit lower than say an FHA loan for the loan limits. Ok, and how does this program differ from other Down payment programs?
So it’s different because it’s not really a down payment program but it allows financing up to a 100% of the purchase price.
And it’s interesting because you can actually use this program with 1 or 2 of the other programs.
If you need closing cost assistance But, what’s unique it’s a 100% Financing. So you don’t need a 2nd or a 3rd lien on the property.
Your interest rates are typically lower Than if you combine it with a down payment assistance programs.
And you don’t have to repay any down payment assistance It has a monthly factor It’s like mortgage insurance upfront It’s financed at a monthly component.
FHA vs USDA vs VA Loans in Pennsylvania
Much less than FHA. o if you can qualify for this program It’s better than FHA And As we mentioned, rates and payments Are typically lower on this program.
So USDA is really a great program. And on average How much does the home buyer have to come in with out-of-pocket?
So Again, we are financing the whole loan Purchase price up to 100% So the only thing remaining is then the closing costs .
Typically, plan on around 3% of the purchase price for funds to close. The question there then becomes, Well, Where does that come from?
Typically, we ask the seller to cover those costs.
And if we can get the seller to cover 3% then, the buyer may only need to come in with an earnest money deposit.
And they may even get most or all of that back. If the seller is covering all the fees. One unique feature about USDA Loans in PA Versus all other loans is that if the home appraises for more than the purchase price.Hi this is USDA Loan Info, the mortgage lender in Pennsylvania specializing in USDA Loans PA! Today, we are going to teach you how to qualify for a mortgage well there's a lot of things obviously that a lender has to look at so let's go through each and every one of them. The first one that stops everybody and they get all nervous is credit. Now, some people have outstanding credit and some people hey they have challenges maybe they had late pays you know bad things happen to good people all the time and sometimes that's the reason for a low credit score sometimes it's you don't even have enough credit so let me give you a way to think about how the lender will look at your credit they say to themselves hey if this guy can't pay a $25 a month credit card are we gonna lend them three hundred thousand dollars it's a small way of thinking don't think fold up think bigger think I'm not gonna go out to dinner I'm gonna pay my bills first you pay your bills this is what my mama taught me first you pay your bills you pay the mortgage you pay all your other debts then you figure out a wheat and steak over eaten beans it's just a way to think if you think like that in a short period of time your credits gonna be good enough to fire your landlord. Okay next thing lender needs to know income well do you have job stability how long you been on your job look you could get a job and get approved the next day you really can but if you change jobs every three months well that job stability isn't there they want to see some kind of stability do they want to see income of course how do they know that you can afford to make that payment they need to know that you have the income they expect it to continue for usually three years is what they're looking for obviously you can get fire you can get laid off things could change but they have a reasonable expectation of three years going forward that the income will continue so they want to see that they'd love to see a history the stronger the history the stronger the case you could fire your landlord okay next thing they want to see downpayment they call this skin in the game if you put up your own money that you worked hard for for a down payment they say hey they got some skin in the game they're serious they're committed now if you put a zero down program and we have these zero down programs they work great for some people but it makes a little bit tougher for the underwriter to say yeah they're worth taking a shot on so we want to see a down payment sometimes people put $200,000 on a down on a four hundred thousand dollar house do they have some skin in the game it makes the underwriters decision way easier doesn't it and if a person can't put a thousand or two thousand dollars down it makes the underwriter a little nervous so take advantage of the programs save some money but be sure that you're ready to show you're committed to this transaction okay something else obviously the underwriter wants to see we need an appraisal of the property we have to know the lender needs to know that if it's a four hundred thousand dollar loan that the house isn't worth three hundred and fifty thousand dollars so the collateral is the last piece of the puzzle that they have to make sure it's worth it but that also protects you as the borrower why because if you commit to buying a house for $400,000and it appraises at three hundred and eighty thousand is that something you really want to do so this is designed to protect you and protect the lender that's a big deal okay not only do they want to see your credit but on the credit report it's a list of debts what do you mean well you have your car payment on there you have your credit cards you may have child support alimony we have to look at all the debts if you make $5,000 a month but you have $2,000a month in debt doesn't leave a whole lot for a house payment so we have to look at all the numbers versus your income so that's the last thing that they're gonna want to see how much is going out already because you're going to add on this new house payment okay so those are the five things that a lender needs to see they want to see your credit are you responsible do you pay your bills on time or do you make excuses for not paying them do you have crazy debt that's out of control that you can't handle when you add on house payment do you have income and job stability how's that going do you have five new jobs or one new job it doesn't really matter if you have two or three jobs but if you change your job on a regular basis not gonna work what else they want to see how much money you've saved what's in your 401k what's in your IRA what is in your bank do you save money do you have a financial responsibility that you are showing you are a responsible borrower those are the key things they want to see and obviously the appraisal they want to make sure the collateral is solid it protects the lender and protects you so this is Chris Trapani call me I'll help you figure it out and together we're going to fire your landlord!.
We can finance the closing costs Up to that appraised amount So, no other loan I know that we can actually finance the closing costs. on that type of loan.
What type of home buyer is this USDA program ideal for?
So certainly those that don’t have access to money for a down payment.
Anyone that wants to live that doesn’t have to live within a metropolitan area because, again, the house has to be in an area that is not in a high densely populated area in Pennsylvania.
It’s also suited well for people who have some credit issues and anybody that qualifies for this program would definitely be better served than going FHA so those type of people.
And besides the Area restrictions are their any other property restrictions?
So property restrictions are going to be similar to FHA They’ll do manufactured homes.
They’ll do homes with Casitas. So no real other restrictions. Just if it conforms to the FHA guides then it should qualify for USDA in Pennsylvania.
There’s a couple little quirky things That you don’t run into very often.
For example, you can’t actually have a barn on the property It definitely can’t be for agricultural purposes. It has to be for residential purposes check out our next blog section packed with facts on USDA Loans and Mortgage Lenders.
USDA Loan Income Limits in Pennsylvania:If the elevator tries to bring you down, gocrazy. Punch a higher floor. This is Dan on your inside team at Growella. It's Monday, July 9, 2018. Get ready. It's today's The Mortgage Minute-and-a-Half. People be like put me in work work work workwork work. And employers obliged. Friday, on the ninth anniversary of the endof last decade's recession, the Bureau of Labor Statistics reports that two-hundredthirteen thousand people entered the U. S. workforce last month and that's a positivesignal even though not everyone re-entering the force has found an actual job. Just the act of looking for jobs suggestsconfidence among U. S. workers, and confidence leads to consumption which drives the domesticeconomy forward. The jobs report also showed U. S. worker hourlywage growth to be on the downswing, a data point which gave mortgage rates a quick Fridayreprieve. Slowing wages reduce the pressure of economicinflation and when the pressures of inflation drop, mortgage rates often do, too. So, take a look at today's live rates andget yourself a quote. Rates are holding near the lowest in six weeks. Today's mortgage rates are in the dirt dirtdirt dirt dirt dirt. Interest rates for FHA loans, VA loans, conforming,USDA, and jumbo -- everything's up to kick off the week. The rates you get from a lender are customizedand more than a dozen factors go into your quote. Whether you go fixed or ARM, full fee or zerocost, even your choice of lenders affects the rate you get so talk to two or more lendersand find your preferred combination of rates, fees, and service. No matter how far you push the envelope, it'llstill be stationary. And no matter how matter how many times youhear you need twenty percent down to buy a home, it's still going to be not true. You don't need twenty percent down to buya home. And that fact makes a data point from EllieMae a little more concerning. The mortgage software firm asked more thanthree thousand renters: "What's stopping you from buying a home" and the overwhelming answerwas "I haven't saved enough for a down payment". Of all things, saving for a down payment shouldnot be the thing that stops you from buying. After all, there are seven government-backedmortgage programs that let you make down payments of less than five percent -- some don't evenrequire a down payment at all. HomeReady, HomePossible, HomePath, FHA loans,USDA loans, VA loan, Conventional 97. Then, there are local government programsthat give money to buyers for buying in particular areas. Forgivable money. And it's there, if you want it. So, don't get hung up on the twenty percentdown thing if you want to buy a place. Lenders don't care so much what you put down. They just want to know you can make your monthlypayments. So, talk to a lender and find out what's possible. You can't know until you ask. Growella does timely and relevant mortgagenews three times weekly and you can visit the site at Growella dot com for more excellentmortgage and real estate news. Go on and click the like button. What's blue and not heavy at all. Light blue.
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