What are the requirements for the USDA program in Pharr? 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 Pharr.
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 Pharr 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 Pharr.
It has to be a Single Family home in the Pharr 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 Pharr – Do You Pre-Qualify?
The human head weighs eight pounds.
I'm Dan on your inside team at Growella.
And, this is today's Mortgage Minute-and-a-Half.
You can't judge a book by its cover.
Well, sometimes you can.
But you definitely can't judge a real estatereport by its headline.
Especially in the case of this month's HousingStarts report from the U.
Department of Housing and Urban Development.
The report measures the number of times builders"broke ground" on new properties over the past 30 days and the most recent Housing Startsreport shows a overall slowdown in the number of starts nationwide.
And, that's what the news is reporting.
"Housing Starts Fall More Than Expected","U.
February Housing Starts Fall Seven Percent", "Housing Starts Tumble".
And if you only got your news from the headlines,I'd forgive you for thinking that housing was down.
But, it's not.
These headlines, they're misleading becausethey lumping a whole bunch of government data into a single, combined figure that's notmuch help to everyday home buyers like me and you.
The reason Housing Starts is down? Because of a drop-off in data linked to apartmentbuildings with five or more units.
And, that's not what people like us buy.
We buy single-family homes and condos andother detached properties and the data on homes like these is strong.
Like, the strongest in ten years strong, finallyapproaching pre-recession levels.
Although you wouldn't know it from the headlineswhich are out there throwing doom.
Which is one more reason to surround yourselfwith professionals.
A skilled REALTOR or loan officer can helpyou make sense the market, to make a better choice.
Why you mad? Fix ya face.
Because mortgage rates are dropping todayand that's good news if you went to contract on a house this past week.
Mortgage rates for conforming, FHA, jumbo,VA and USDA loans are down as compared to Friday, but the amount they've dropped willdepend on where you get your rate.
Mortgage lenders use different pricing modelswhich respond differently to changes in the mortgage-backed market, which means that thelender that was best priced before the weekend may not be the one that's best-priced afterit.
This is one of the reasons why it's smartto shop around when you're looking for a mortgage.
Get quotes from two or more lenders to makesure you're getting a great price.
Thanks for the memories, mortgage rates.
Even though they weren't so great.
Because mortgage rates today are rising andthat's bad news if you went to contract on a house this past week.
Mortgage rates for conforming, FHA, jumbo,VA and USDA loans are higher as compared to Friday, and up about a half-point since theNew Year.
But the specific rate you can get today willdepend on your choice in lenders.
Mortgage lenders use different pricing modelswhich respond differently to changes in the mortgage-backed market, which means that thelender that was best price before the weekend may not be the one that's best-priced afterit.
This is one of the reasons why it's smartto shop around when you're looking for a mortgage.
Get quotes from two or more lenders to makesure you're getting a good price.
homeowners are refinancing different,according to Freddie Mac's most recent Quarterly Refinance Report which shows that of all therefinancing households that started with a thirty-year fixed rate loan, twenty-nine percentof them abandoned their thirty year and switched into a fifteen.
It's the highest percentage of homeownersmoving from a thirty to a fifteen-year fixed in more than a decade.
So, why are homeowners switching into 15-yearloans? Among other reasons, fifteen-year mortgagespreserve wealth.
At today's rates, over the life of your loan,you're going to pay thirty-seven percent less interest to your lender with a fifteen ascompared to a thirty and, on a three-hundred thousand dollar loan, that keeps an extraone hundred forty seven thousand dollars in your pocket.
That's money not spent and it can be usedfor whatever you want -- to pay for college, to buy a second home for your retirement,to invest in whatever it is that interests you.
Use it for whatever you want.
It's a lot of money and it's the upside ofpaying off your loan fifteen years faster.
Talk to your mortgage lender about your fifteen-yearhome loan options and see if a shortened up loan term can be right for your long-termplans.
Growella does mortgage news three times weeklyand we go live each Thursday at Noon Eastern, 11 Central.
So, put a like on it, leave a comment, andremember that mountains aren't just mountains.
They're hill areas.
How to buy a home with no money down - USDA Home Loan Program
Well hi there, I'm Michael Hausam of TheHausam Group at Vista Pacific Realty; so I had a couple of buyer consults last weekwhere the issue of pre-qualification came up.
or pre-approval or conditionalloan approval; there's a bunch of different words for that; oftentimesthey're used interchangeably, but this is arguably as an upfront effort one of themost important things that a homebuyer can do and the confusion about theseterms and what they mean is pretty significant; also there's quite atremendous strategy involved if you complete this process correctly; so Iwant to define a few terms and correct a few errors along the way; all right, sofirst of all the pre-approval or pre-qualification, conditional loanapproval, whatever you call it, is basically all the work that's done by abuyer up-front, before they ever go out and buy a house; okay it really makessense to do that no matter what because you want to be making sure that you'relooking for homes in the price range that you can qualify for and also itmakes a heck of a lot of sense to make sure that the home that you'd like issomething that you can actually spend the money on to buy, both on the cashdown as well as a monthly basis; but let's look into the details;there are basically three levels of work that can be done upfront; number one iscalled pre-qualification; pre-qualification is a verbalconversation with a lender; sometimes it might include a credit report sometimesnot, it never includes providing incomedocumentation; basically a pre-qualification is a paper-napkindiscussion with the lender that says, "yeah this is about whatit's gonna cost and if everything you told me is correct, you might be able toget a loan.
" It basically is the simplest, least intrusive way to have aconversation with a lender to kind of figure out, "yeah I think you couldprobably qualify for a loan.
" But let me assure you this, precisely zerolistening agents and home sellers are impressed with the pre-qualification; thesecond level of advanced work is known as a pre-approval; now way back in theday, in the 1990s when I first got into the mortgage business, a pre-approvalmeant that you took an entire loan file and took it to an actual humanunderwriter who went through everything and signed off on the loan; that wasliterally pre-approved before finding a home; well nowadays it's a little fuzzierthan that; a pre-approval typically will include providing income documentationto the lender, pulling a credit report, and then submitting to an electronicunderwriting process, but no formal loan underwriting approval is given; basedupon my experience roughly 99.
9 percent of all transactions go together with apre-approval.
But notice the key point on that: no underwriting approval from anactual human underwriter; what they do is this is they take all the incomedocumentation and then they type it in the computer - pay stubs show this - incomeshows that - credit report shows this - they put that all into a computer press ENTERand Fannie Mae's version of this is called the desktop underwriter and itspits out what they call a "finding" and the finding is they are going to getapproved; or you're likely going to be approved; what it isn't is an actualapproval; the key test would be this: if you've got what you think is a fullyunderwritten loan approval from a lender, you can ask them what are the conditionsof the loan approval and you'll hear something like, "well, we don't have actualloan conditions yet because you need to find a house and submit the loan withthe contract and appraisal and all that to get your loan conditions.
" Well that'sthe key: you don't have an approval you have an electronic pre-approval, which isnot quite as strong and that brings me to number three: aconditional loan approval or sometimes it's calleda TBD approval; TBD meaning the property is to be determined; the conditional loanapproval is like the pre-approval of old and that is you take the entire file, thepay stubs, the bank statements, the tax returns - everything - the credit report, yousubmit that to an underwriter, who goes through and signs off on it, will provideof list conditions from the lender in order to close the loan; it literally isa loan commitment; and this is the important part:the typical lender and I would say in my experience probably 2/3 of them do notlike to do conditional loan approvals, because that underwriter is a twohundred or two hundred and fifty thousand dollar a year person and their autograph,literally their signature, is sufficient to release those funds and the lender'sgonna want that underwriter not working on deals that haven't yet happened, but onthose that are already in escrow; but the key thing is if you find a lender whowill get you a conditional loan approval, you can literally go out into themarketplace with an approval in hand, effectively negotiating as cash; let meshow you an example: this right here, this is a conditional loan approval on atransaction that I did recently, from a lender that I work with called Parksidelending and if you look at this two page, three, four-page document, it's got theunderwriters name right here: Sean Mackie; it has a full on commitment from thislender with a list of prior-to-doc conditions, going onto two pages and thena list of prior to close conditions; so this is literally the commitment fromthe lender to make the loan; so the borrower's and I (my clients), we wentthrough and looked at all of these conditions to make sure that there wereno conditions on here that we couldn't meet; once we figured that out and wewere satisfied, we were able to write an exceptional offer ;the offer that wewrote didn't have a loan contingency at all; it was very important that myclients' problem, which was they needed a loan, and literally that is a problem: ifyou don't have enough cash to buy a house and you need a loan, that's yourissue, that's not the sellers issue; so we wrote the offer without a loancontingency because we already had the loan and we didn't need the time to goout and find one; and that effectively made my clients just as good as all-cashbuyers; well, as you could imagine, the listingagent and the seller loved that and we got the transaction accepted;surprisingly, we found out later they were competing against a 50% downoffer; so think about this: my clients were writing a 20% down offer,the competition was writing a 50% down offer; now typically you would think thata 50% down offer would be a better offer than the 20% down, right? Well not in thiscase; the 50% down offer, they asked for a two-week loan contingency, my clientsthey asked for none; if you'd like to discuss this further, I'd be happy tohelp you ;you can call me 949 413-2371, youcan also email me Michael @ HausamGroup.
Com Thank you very much and have agreat day!.