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.What's the process, when do you even start looking for a loan? Do you advise that people start before they even find a house or is this something where uh, once you kind of find the place you should go and get a long, kind of, pre-qualified? I always recommend that you start with the mortgage lender, before you start shopping and getting your heart set on something that may or may not be in your price range. I always usually recommend, if possible, stay with a local lender. That way there's no excuse of, "I didn't get the fax that you sent me. " You can actually go into the office. Just like Joel, he's right here in Greenwood. Bring the stack of papers to him and say, "You scan it, and you send it off. " But yeah, a mortgage lender is like the very first step. You can contact a realtor, I love it when people contact me first because I have preferred people that I've had experience with, working with lenders. Usually your realtor is going to have a list of lenders that they have worked transactions successfully with that they can provide you some guidance on. Yeah, and just to reiterate on that a little bit, there's nothing wrong with going and seeing Melissa and letting her know what you're looking for, so she can start kind of taking a look at the market and seeing what's going on, but you really want to come talk to a lender first because let's say you go and you find this house and it's $250,000 or $200,000 or whatever it may be and you love this house and it's everything you've ever wanted and you put in an offer and then you go talk to your lender afterward, there may be something that came up on your credit you weren't or your income didn't quite qualify you for that much. Then the next thing you know, all your hopes and dreams are gone, and you'll be upset. So get with your lender to make sure you're prepared before you go out and start you know, looking at houses. Well, even if you are going to be looking, maybe next year, or six months out, I would say go ahead and contact a lender because, like, Joel's great about looking at their credit and saying, "Hey, this is going to cause you some problems, these are some ways you can go ahead and, you know, step up that credit score by, you know, doing X, Y, and Z. " So it's always to go ahead, as early as you can and start working with your lender to get yourself ready. Yeah, it's never too to get in touch with me and let me know what you're looking for. So immediately? Mmhmm. Yep.
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:The USDA Guaranteed Home Loan Program is backed by the USDA – the United States Department of Agriculture. It is a TRUE no money down home loan. Many people who take advantage of this program are able to get into their homes with little to no money out of their pocket. BUT, there are several eligibility requirements that you need to meet in order to take advantage of this home loan program. The first requirement is that you cannot be a current homeowner. If you already own your home but are planning to sell it, then you are still eligible! You just need to have your existing home sold BEFORE we can close the loan for your new home. The next requirement is that your total annual household income cannot exceed the limits set by the USDA. These income limits are based on market area and family size. Another requirement is that you cannot have defaulted on a USDA loan in the past. This means that if you’ve had a past USDA loan that has gone in to foreclosure, you unfortunately aren’t eligible. To take an advantage of this program, the home has to be located in an eligible rural area. But guess what, rural does not necessarily equal country! Homes do not have to be in a country setting. In fact, there are many areas where entire counties and cities qualify for this program. The property has to meet minimum property standards. The home must be in satisfactory condition, and this loan cannot be used to finance any sort of income producing property. That means mini farms, and properties with farm acreage are not eligible.
What is a USDA Loan in Pennsylvania?
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