USDA Home Loans Texas

Financial hurdles, such as down payments and closing fees, can make home ownership appear impossible for many prospective buyers. Capital Home Mortgage is pleased to offer the USDA-Guaranteed Home Loan to Texas home buyers.

If you’re looking to buy a home in a rural area in Texas, the USDA loan is one of your best options.

What You Need To Know About USDA Home Loans

A Texas USDA-Guaranteed Home Loan Program is one of the most powerful mortgages available to homebuyers in rural and suburban areas. 

A government-backed mortgage issued through the Rural Development Guaranteed Housing Loan program, USDA loans make home ownership more affordable for low- to moderate-income individuals in eligible rural areas who may not qualify for traditional mortgage products.

USDA Loan Eligibility and Property Requirements

USDA loans have qualification requirements for both the borrower and the property. Eligibility for a USDA loan is determined by the property’s size, location, and condition, the borrower’s income, and other qualifying factors.

The following is a rundown of the basic eligibility requirements for USDA loans:

• Residency: 

You must be a United States citizen, a legal permanent resident, or a qualified alien.

• Income: 

Your income cannot exceed 115 percent of the area’s median income. The USDA evaluates your household’s income to ensure that it does not exceed the limits for your area.

• Employment: 

The USDA prefers applicants with a two-year history of stable employment.

• Debt-to-income ratio (DTI): 

The DTI ratio determines how much of your monthly income goes toward debt payments. The USDA allows a maximum DTI of 41 percent.

• Property eligibility: 

The USDA allows the purchase of single-family homes, planned-unit developments, condominiums, modular and manufactured homes, and new construction for unoccupied homes. The property must be less than 2,000 sq. ft. and cannot have an in-ground swimming pool to qualify for USDA direct loans.

• Occupancy: 

Single-family USDA loans can only be used to finance a primary residence.

Minimum Credit Score Requirement For USDA loan

The minimum credit score for a USDA loan is 640. However, if you don’t have enough credit to obtain a credit score or have a score less than 640, you can fill out a credit history worksheet, Form RD 1944-61, for consideration. With this form, you can use rent, utility bills, and phone bill payments to show creditworthiness.

Advantages Of A Texas USDA Home Loan

USDA loans may offer a great alternative to conventional mortgages or other government programs such as FHA or VA loans. The benefits of USDA loans to homebuyers include:

• Low Down Payment: 

The down payment requirement for USDA loans can be as low as ZERO percent.

• Low Fees: 

Borrowers must pay a guarantee fee of 2% of the total loan amount. This fee, however, does not have to be paid in advance and can be rolled into the mortgage.

• Low Rates: 

USDA loan rates are typically lower than conventional or FHA loans. This benefits borrowers with lower credit scores because they can get the same low rates as those with excellent credit.

• Streamlined Refinancing Process: 

For homeowners looking to refinance their mortgage, the USDA has a streamlined program that speeds up the process to about three weeks. Credit reports, a home appraisal, or a property inspection are no longer required. 

Interested In A Texas USDA Loan?

USDA mortgage loans are an excellent option for first-time home buyers and even repeat home buyers who cannot obtain financing through a conventional mortgage. For those with a moderate income, the USDA mortgage requirements for 2022 are flexible and accommodating and could be your pathway to homeownership.

If you want to know more about USDA loan eligibility and how to apply, contact Capital Home Mortgage today and speak to one of our USDA mortgage specialists.