For some lower-income borrowers, borrowing enough money to purchase a home can be a very challenging task. Fortunately, there are USDA mortgage loans. These low-interest-rate and zero-down-payment loan options can make all the difference for those who wanty to purchase a home for less.

What is a USDA Mortgage Loan?
Similar to FHA and conventional mortgage loans, USDA mortgage loans are taken out by a borrower for the sole purpose of purchasing a home. The main difference is that USDA loans do not require a down payment. USDA mortgage loans are not offered by the USDA; they are offered by traditional lenders and banks and supported by the U.S. Department of Agriculture. They serve as a form of aid for low-income Americans who do not qualify for traditional mortgages.

Who Qualifies for a USDA Mortgage Loan?
Generally, to qualify for a USDA mortgage, a borrower must:

• Be a U.S. citizen
• Meet the income requirements
• Agree to live in the home as a primary residence
• Purchase a property that meets all program criteria

There are many more specific USDA eligibility requirements borrowers must meet to utilize a USDA mortgage loan. For example, a borrower must have a consistent monthly income that can be proven by income tax returns, a FICO credit score of at least 640 and, in many cases, a debt-to-income ratio that is lower than 41 percent.

USDA Mortgage Income Limits
1-4 member household: annual household income to not exceed $86,850 but up to $212,550 for certain areas
5-8 member household: annual household income to not exceed $114,650 but up to $280,550 or certain areas

USDA loans are typically restricted to 29 percent or less of your monthly income. Other monthly debts should not exceed 41 percent of your monthly income. Additionally, USDA mortgages require borrowers to pay a mortgage insurance premium, not to exceed 2 percent of the total loan amount.

What are Current USDA Mortgage Rates?
Knowing USDA mortgage rates can help you better understand how much house you can afford with this loan option. Use our simple mortgage calculator with USDA mortgage rates today.

How to Apply For a USDA Mortgage Loan
Similar to most traditional loans, to obtain a USDA mortgage, borrowers must supply personal and financial information, such as:

• Proof of U.S. citizenship
• Credit score report
• Pay stubs and income tax returns for the past two years
• Documentation of bills and other financial obligations
• Records of other debt payments (auto loans, utility bills, student loans, etc.)

At Wyndham Capital Mortgage, we can help you with your home lending needs. Get started today!