USDA Loan Eligibility

By Franklin Rhodes • March 14th, 2011

The USDA, or United States Department of Agriculture, has certain USDA loan eligibility requirements for taking out a USDA mortgage.  The purpose of getting a USDA loan is to finance your home or business in a rural area.  The USDA offers you a no down-payment loan if you buy a home in the country, thus helping to decrease the crowded areas of urban developments.  Because you get a 100% home loan from the USDA, with no equity required, it makes sense that there would be certain requirements to determine your eligibility.  These will be explored here so you can decide if you could be entitled to a loan from the USDA.

How to Qualify for Your 100% Loan

There are two main requirements for USDA loan eligibility.  The first is that the home you want a 100% loan for must be located in a rural area that is qualified by the USDA.  You will need to explore the various requirements for a USDA loan based on whether the building is a single-family home, a multi-family home, or a business location.  Rural locations as well as disaster areas may be eligible for you to receive the USDA mortgage that involves no equity required and no down-payment.  Various states have specific areas that have been approved by the USDA for the distributing of these kinds of loans for homeowners and business people.

The second primary requirement to determine your USDA loan eligibility is your income.  The income limit you must fall under to receive your USDA loan varies by state and county.  Different areas of consideration are taken into account to provide you with deductions, such as the number of people living in the household, whether anyone is attending school, the age of all residents and the applicant, and whether or not anyone in the household has disabilities.  For example, the maximum adjusted household income for Larimer County, Colorado is $86,450 or $48,100 depending on whether you choose Guaranteed Rural Housing or Direct Rural Housing, respectively.

However, if you make slightly over the limit, you may still qualify for a USDA mortgage with no down-payment if the other areas of consideration—age, school, disabilities—provide you with profound enough deductions.  The ability to obtain a 100% loan with no equity required is a huge benefit of a USDA loan.  If you are interested in buying a home in a rural area, you could benefit greatly from looking into the requirements for USDA loan eligibility in your area.  Soon, you could secure a USDA mortgage and appreciate benefits like no down-payment and no equity required.


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