What are the requirements for the USDA program in Plano? So that’s going to be looking at a 640 minimum credit score requirement.
There is a income requirement too when applying for a USDA Loan Plano.
So basically the income requirement is about 78,000 if you’re in a family of 1 to 4 if you’re in a family of 5+ that’s gonna go up to about $103,000 on the income limit.
The big requirement for USDA is that it’s property specific.
It’s got to be in a USDA Approved Zone. How much down payment does this program require?
It’s actually 0% down payment which is Great!
Ok Awesome, and how much does the average home buyer come in with out-of-pocket?
So because your down payment for a USDA Loan in Plano is covered you’re just gonna have to come in with again your prepaid and closing cost So if it was a $300,000 purchase.
you’d be looking at about $7,500 cash for keys to get in the home.
What type of home buyer is the USDA Loan program Ideal for? So this is going to be ideal for the home buyer that’s looking for a property in those specific areas.
Ideally it’s properties that are going to be USDA Eligible rural zones.
So not right in the middle of the city, but maybe if it’s more on the outskirts, on a little bit of land, lower tax rate areas that’s probably going to be a property that’s eligible and that would be ideal because that one would probably qualify OK, Fantastic.
What is a USDA Home Loan?
I bet you’re wondering, what is a USDA home loan?
Designed with the residents of more rural areas in mind, the United States Department of Agriculture designed its loan program to enrich rural communities by providing affordable home loan options to low-income households that may not be able to secure home financing through other means.
Who has time to stop and smell the roses? You don’t, and this isn’t even a rose.
What are the requirements for the USDA program?
So USDA has a few interesting requirements First of all, you’ll need to have at least a 580 credit score Some lenders 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
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 (Riverside county) 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 stands for United States Dept of Agriculture But it’s NOT a farm loan.
Specifically, they don’t finance this program for farms in Plano.
It has to be a Single Family home in the Plano area, without a barn structure on the property.
Then it also has 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.
Much less than FHA So if you can qualify for this program It’s better than FHA And As I 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 Versus all other loans is that if the home appraises for more than the purchase price.
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.
What type of home buyer is this 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.
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 There’s a couple little quirky things that you don’t run into very often like 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.
USDA Loan Plano – Do You Pre-Qualify?
- So the company wasestablished back in 2008, by Vance Hillstrom and Doug Watson, right now we're at abouteleven people in total, our back office and then sixcells guys in the outside.
My role in the companyis originating loans so at the moment we haveover three hundred and twenty accredited investors in our fund, so we are a direct lender,we're not syndicating any portion of your fundthat are gonna be provided, so being a direct lender,we do have the flexibility of speed, although everybody gets tied up, how quickly can you close,it really comes down to the preliminary titlereport, if it's a clean prelim then of course wecan move a lot faster, but in some cases I comeinto the middle of a deal where the previous lender couldn't close, and then there's ten items listed on the preliminary title report,so that slows things down but then again being direct,we can get back to you with a letter of intentwithin twenty-four hours, we can get out to theproperty, if we engage in a transaction within seventy-two hours, why I say that is, forexample if we get the deal on a Friday, then we'llprobably be out to the property that following Monday, butif we get it on a Monday we'll probably be out to your property on a Tuesday, or Wednesday at the latest.
- [Interviewer] So you do site visits for every single loan ? - Yes, we do come out to everysingle property we lend on.
- [Interviewer] And then whotypically does the site visit ? - In most cases, Vance, but you know, sometimes people go with Doug, but if it's multiple propertiesthat we're looking at they'll probably splitit, like we did a deal recently where one propertywas down in Carmel, and the other property was by Tahoe, so they split it up, to notdrive the whole Bay area.
- [Interviewer] So one of thetwo principals has to go look at the subject property ? - Yes.
- [Interviewer] So overall,what are the mean benefits of doing business with Rubicon, as opposed to anotherprivate lending company ? - We are local, here in the Bayarea, so that's a huge plus, how we set ourselves apartis being very transparent with our borrowers, both ourborrowers and our investors, if a deal doesn't makesense we'd rather just tell the client right awayit doesn't make sense, and we'll point themin the right direction or simply back off.
Speed is another greatfactor, again if it's a clean preliminary title report, if it's a clean property we'regonna close quickly.
We do have a good understandingon each sub-market and if we don't, we have contacts that we can reach out to andget down to the number quickly.
- [Interviewer] And noappraisals, of course.
- Of course, no appraisals,so that speeds things up if you have one, great, if youdon't, we don't require one.
[Home Loans] Conventional Loan | FHA Loan | VA Loan (Mortgage) FHA
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.