USDA Loans In Lubbock & Surrounding Areas

Homebuyers in rural areas can qualify for a USDA mortgage with no down payment required. The United States Department of Agriculture administers a loan program known as the USDA Rural Development Guaranteed Housing Loan Program, through which it grants USDA loans. Another name for this program is the USDA Loan Program.

How Does The USDA Loan Program Work?

There are two types of USDA Home Loan Programs, Direct and Guaranteed.

• USDA Direct Home Loan

These mortgages are issued by the USDA and are intended for borrowers with low or extremely low incomes. Different regions have separate minimum required income requirements.

This program is known as Section 502 Direct Loan Program. It helps low- and very-low-income applicants get adequate, safe, sanitary housing in qualifying regions. Payment assistance is a subsidy that temporarily lowers mortgage payments.  The amount of assistance is determined by the adjusted household income.

           – USDA Direct Eligibility Requirements

Several criteria are considered when deciding who gets approved for a Single Family Direct Home Loan. Direct loan applicants must meet some minimal requirements to be eligible, the most basic of which is having an adjusted income at or below the statutory low-income level for the area where they seek to buy a house.

All applicants must meet the following requirements to be eligible for a USDA Direct Home Loan:

1. Not being able to secure a loan from other sources on terms and conditions that can be expected to be satisfied;
2. Have no access to housing that is adequate, safe, and sanitary;
3. Must not be excluded from or prohibited from federally funded programs;
4. Must be a US Citizen or a qualified resident alien;
5. Be able to take on a loan obligation legally;
6. Must occupy the property as a primary residence;
7. Must not be an income-generating property;
8. Property must be no more than 2000 square feet;

As the name “Direct” implies, eligible home buyers that meet all the requirements must apply directly to the USDA regional office in their respective areas.

• USDA Guaranteed Home Loan

USDA Section 502 Guaranteed Loans are only available at a fixed rate of 30 years.

The program reduces the risk of offering 100% loans to eligible rural homebuyers by providing approved lenders with a 90% loan note guarantee. This allows approved lenders to extend 100% loans to eligible rural homebuyers with no money down required.

Prospective home buyers must meet the following requirements to be eligible for the USDA Guaranteed Home Loan Program:

• Their household income must not exceed 115% of the area median income (AMI);
• Must occupy the property as a primary residence;
• Must be a US Citizen or a qualified resident alien.

Apply for USDA Guaranteed Home Loan

Capital Home Mortgage is a USDA-approved lender in Texas that manages the loan application process. Contact one of our USDA home loan consultants at (806) 589-3428 or apply online to initiate your USDA-guaranteed home loan.