Did you know that the whole island of Kauai is USDA eligible? Did you know that the USDA loan program allows for you to put down 0% if qualified? Below is some information on the program that will help you learn more about the USDA loan program.
The US Department of Agriculture has developed a loan program that is specifically for rural areas. This program is a no money down loan program backed by the USDA. It is a fairly new program, that was launched in the 1990s. To qualify for this loan program you must meet a series of requirements including the following:
- Meet income elgibility
- Agree to personally occupy the dwelling as your primary residence (no investment or 2nd homes qualify)
- Be a US citizen, non-citizen national, or qualified alien
- Purchase a property that meets
Some of my clients don’t realize that when qualifying for a USDA loan, there are also income restrictions. Depending on which county you live in, per the USDA website, there are certain caps that are placed on the household income. If there is only one borrower on the loan, the combined household income of anyone over the age of 18 is taken into consideration when determining eligibility. For example, per the http://www.rd.usda.gov website, the income limit for a 4 person family is $112,900. If the combined income is greater than this, then it is not USDA eligible.
Although these loan programs allow for 100% they do also have a mortgage insurance premium that you must pay. The mortgage insurance is paid as an upfront fee at closing, much like the FHA loan program, rolled into your loan amount. However, the USDA mortgage insurance premiums are less that of an FHA loan. On top of the upfront fee, there is a smaller annual fee that is divided up and added to your monthly payment. There are also DTI (debt-to-income) and credit score requirements for this program. Here are the pros and cons of this program:
If you have any questions about this program, please reach out to me and I am happy to go over the benefits of this program with you and to let you know if you are eligible for this program! It can be an excellent program for some people, and if this isn’t the right one for you then lets see which one is! 
Mahalo!
Jess