If you want to buy a house but find it hard to actually save up for a down payment, it’s time to check out USDA home loans. These loans greatly help households with low-to-average income to acquire their own homes because they do not require a down payment. This could be a very good option for you to finally own a house.
There is one limitation to trying to get USDA home loans, though. They are only open for houses within Department of Agriculture-defined “rural areas”. If you’re planning to move to New York or Hawaii, which are both states that can be called urban at first glance, you can still get USDA Home Loans New York or Hawaii. Why is this? Let’s first understand better what USDA Home Loans are.
USDA’s Definition of Rural Area
Researchers and policy officials have varying definitions of urban and rural areas. The United States Department of Agriculture (USDA) on the other hand, surprisingly has a very loose definition of what is takes for an area to be rural. According to the department, rural areas are defined as “open country and not part of urban areas”. This is already an updated and broad definition of rural areas within the country. So, there is no need for you to worry as generally urban states can still have rural parts in them wherein you can find a USDA-loanable home.
How do I qualify for this loan?
Whether applicants are looking to move in a more urban state such as Hawaii, they could still apply for USDA Home Loans Hawaii. But how do I know if I qualify? Here are the following eligibility criteria:
- U.S. citizenship or legal permanent residence
- Applicants must be creditworthy and much be able to prove it
- Applicants should have dependable and stable source of income
- Applicants should be willing to repay the mortgage
- Income should be equal to or less than the state’s AMI
- Houses bought with USDA loans should only be used for primary residence
In addition to all these qualifications previous mentioned, there are credit requirements that applicants need to prepare for. Lenders usually review applicant credit in order to fully gauge how much trust they could give them to approve them of borrowing money. These are the other credit-related items to be reviewed by your lender.
- Credit score
- Repayment patterns
- Length of credit history
- Credit utilization
How to do I find these loans?
Whether you decide to apply for USDA Home Loans Hawaii or USDA Home Loans New York, finding a lender to help you is generally easy – just look it up online. For example: typing “USDA Home Loans” on the search bar can show hundreds of lenders to help you with your application. You can also easily talk to them, and asses their services online.