USDA CONSTRUCTION LOANS
For the first Time USDA now has a Construction Loan
More than First-Time Home Buyer...
1. No loan limit, just income limit.
2. The construction interest can be rolled into the loan.
3. Builder can pay closing costs.
Only Selected Lenders have this product. 1st Signature Lending, LLC is an accredited lender in IN, KY, OH, GA, Fl, SC and CO
We can help you find an accredited builder.
The United States Department of Agriculture (USDA) created the Rural Development Guaranteed Housing loan to help develop rural areas, but they are more that that.. But the fact is all families within the 115% of the median income for their area are eligible for the benefits--even if they have owned a home in the past and even if they currently own a home that is not in the local commuting area.USDA loans are intended for moderate-income families, those having annual household income at or below 115% of the median income for the area. USDA provides a website that shows the income limits by state, county, and family size.
No Down Payment....
The USDA loan allows loan amounts up to 102% of the appraised value of the property. As a result, there is no need for a down payment. In addition, the loan amount may exceed the sales price to finance settlement cost, related expenses, appliance, and repairs to the home.
The USDA loan is based on the appraised value of the property rather than the sales price. When the appraised value supports a loan amount higher than the sales price, the loan may be used to pay for loan closing costs, pre-paid items, related expenses, appliances and/or home repairs. Because there is no down payment and because the loan can be used to cover various costs, there is little or no money out of pocket to close.
The USDA loan has relatively low mortgage insurance requirements, particularly when compared with the FHA loans. USDA charges 2.75% of the loan amount as an upfront premium at closing (that may be financed) and a .30% annual fee on the remaining balance.
The USDA loan does not have loan limits, but the loan amount is limited by the applicant's income and other qualifications. Families at the top of the moderate-income bracket with strong qualifications often can obtain a USDA loan for a higher amount than they would with other government and conforming conventional loans.
Many loan products require reserves equal to several mortgage payments. With a USDA, there is no cash reserves allowing families who have not yet accumulated cash reserves to buy a home. Of course cash reserves makes for a stronger application, but a lack of reserves will not alone disqualify you.
Less-than-perfect credit can be acceptable with a USDA loan, but may be limited by the lender you select. Lenders may consider the personal circumstances of each applicant and make common-sense decisions on a case-by-case basis. This offers an advantage to families that would not qualify for loan programs utilizing only automated computer underwriting systems driven heavily by credit.
No Limit on Seller Concessions...
There is no limit to concessions or gifts, whereas FHA and other programs have a limit of 6% of the sales price. This is particularly beneficial in cases where a seller wants to pay closing costs and also fund an escrow account with net sales proceeds for post-closing repairs that the seller cannot make without first selling the house.
To be eligible for the USDA financing, the agency states that a household's annual earnings must not exceed the median household income for the area by more than 15 percent, with an allowance for the size of your household.
2014/2015 USDA income limits have a floor, based on household size:
1-4 member household : $74,750
5-8 member household : $98,650
Note that USDA income limits vary by area, though. In San Francisco, California, where the cost of living is among the highest in the nation, the 2014/2015 USDA income limits for a 1-4 member household is $131,100.
USDA Construction Loan