Odessa USDA Home Loans

Millions of Americans aspire to own a home. However, the inability to save enough money for a down payment or qualify for a mortgage prevents many prospective buyers from submitting a mortgage application. Fortunately, the United States Department of Agriculture (USDA) provides various loan options to low and moderate-income rural homebuyers to help them realize their dream of homeownership. 

Capital Home Mortgage offers USDA home loans at desirable rates in Odessa, Texas. Find out if you qualify for a USDA-backed mortgage by contacting us today!

The USDA Home Loan

A USDA home loan is a mortgage made or guaranteed by the Rural Housing Service agency of the United States Department of Agriculture. This program is designed to assist households with very low to moderate incomes to purchase safe, affordable homes in qualified rural and suburban areas throughout the country. 

USDA low-cost home financing is available through Section 502 Guaranteed Loan and Section 502 Direct Loan. The guaranteed loans are funded by private lenders and offered to families with low to moderate incomes. On the other hand, direct loans are for families with meager incomes. With a USDA direct loan, the USDA itself serves as the lender. Both programs provide 100% home financing to eligible borrowers.

Who is Eligible for a USDA Loan?

To qualify for a USDA loan, you must meet specific income, credit, and home-buying requirements.

You may be eligible to use a USDA home loan if:

• The land is located in a USDA-designated area.
• You meet the minimum credit score requirements of the lender (typically 640, but this varies by lender).
• Your household’s total income is within 115% of the area’s median income.
• You have a stable and consistent source of income.
• You’re a U.S. citizen, non-citizen national, or qualified alien.

What Properties are Eligible?

USDA home loans can only be used to buy homes in rural areas designated by the USDA. But “rural” in this context doesn’t just mean farmland and houses in very remote areas. USDA loans can also be used to buy many properties in the suburbs.

The condition of the home you’re also buying matters. The USDA lists specific minimum property requirements (MPRs) to ensure that the house you buy is a good investment. Also, these MPRs help the USDA thoroughly check the property before approving it for a loan guarantee.

USDA Minimum Property Requirements

USDA loans offer numerous advantages, but not all homes are eligible. Homes financed by a USDA loan must satisfy the minimum property standards the Department of Housing and Urban Development set. 

These guidelines help ensure that borrowers get a functional, safe, and sound home to live in:

• Direct and easy access to a road, street, or driveway
• Equipped with proper utilities, water, and sewage disposal
• Must have a sound structural foundation
• Must have appropriate roofing
• Must have functional heating, cooling, and electrical systems

USDA financing is only available for the purchase of single-family homes. You must also occupy the property as your primary residence. Properties held for investment purposes or as a second residence are not eligible.

Income Limits for USDA Loans

USDA loans are affordable for people with low to moderate incomes to buy a home. To qualify for a USDA-guaranteed loan, your household’s total income should not exceed the local USDA income limit, calculated using 115% of your area’s median household income. 

For 2022, the standard USDA loan income limit for a 1-4 member household is $103,500 and $136,600 for a 5-8 member household. USDA loan limits may increase to account for areas where housing and earnings are more expensive.

Apply for a USDA Loan in Odessa, TX, Now!

The USDA loan provides significant benefits and makes homeownership affordable to borrowers who meet requirements. Zero-down, competitive interest rates, and low monthly mortgage insurance translate to lower mortgage costs and huge savings.

At Capital Home Mortgage, we can help you put these benefits to work for you. Find out if you’re eligible for a USDA-guaranteed home loan. Call us today at (432) 218-4828!