Qualify for USDA Home Loan | Fort Myers and Naples Area
You can now buy a home in Lee and Collier County using the USDA home loan program with NO down payment. The USDA mortgage is the ONLY no money down mortgage loan program available to non-military buyers in the United States. This program is used mostly for first time home buyers and is a perfect way to buy your first family home.
This is the loan program you wish you knew about earlier. Here, I’m going to tell you everything you need to know about the USDA mortgage; how it works, how to apply for it, and most importantly, whether you qualify for it.
This mortgage loan program is a part of the USDA’s initiative to help families in rural areas across the country buy a new home, or improve existing homes. This mortgage offers no down payment with low interest rates and is not that difficult to qualify.
Due to recent now millions of borrowers across the country are eligible for this no down payment loan program. So, this is your chance to buy the home that you’ve always wanted.
How Does the USDA Mortgage Program Work?
There are three ways in which this loan program works.
#1: The USDA guarantees loans issued by a local mortgage provider, much like how a VA-backed loan works. So you can get a loan at a low interest rate with no down payment. However, you will need to pay a mortgage insurance premium for the life of the loan.
#2: The USDA issues low-interest direct loans to applicants from low-income households. The interest rate for these loans will vary for each borrower.
#3: The USDA provides home improvement loans and grants, up to $27,500, to eligible homeowners that need to repair or renovate their homes before purchasing.
How Does One Qualify for a USDA Mortgage?
To qualify for a USDA mortgage, you need to be a U.S. citizen and have an income that is within the loan guarantee income limit for your county. Lee and Collier counties will have different limits so its important to speak with your mortgage lender to help find out if you fit within those guidelines. Metropolitan areas in Naples and Fort Myers area do not qualify for this program, but if you live in the suburbs or rural area, you can apply for a USDA-backed loan. To check what the income and property eligibility limits for Fort Myers and Naples, have a look at this USDA map.
Your eligibility will also depend on your household income and location and has nothing to do with your occupation – you don’t need to be a farmer or rancher to qualify.
These loans are only applicable to owner-occupied primary residences. This means you can apply only if you’re going to be staying in your new home. You cannot take them for a second home or a third home, purchased for investment purposes.
The monthly loan payment should not exceed more than 29% of your monthly income. If you have other debt as well, your total loan payments made each month should not exceed 41% of your income. However, if your credit score is over 660, you will be allowed to have a higher debt ratio but the minimum credit score allowed is 580 using one of PRMG qualifying lenders.
You must have a dependable income for a period of 2 years, at least, and your credit history should be acceptable. It really helps if your credit score is 620 or higher. You might find it difficult to get the loan if you have a credit score of less than 580. You shouldn’t have any accounts in collections for the past 1 year, if so, they will need to be paid in full on or before closing.
How to Apply for a USDA Government Loan?
If you want to apply for a USDA mortgage, give me a call and I will walk you through your best mortgage options, so that you can buy a home in the Lee county area including Fort Myers and Naples.
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