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The USDA charges a 1% loan guarantee fee at closing that is financed into the loan and also requires an annual fee of .35% of the outstanding principal balance every year. This fee is part of the monthly payment along with Principal, Interest, Taxes, and Insurances(PITI). While the USDA loan is one of the most advantageous home loans, there are some limitations. A family of up to four in the New Orleans Metropolitan area can make up to $78,200 and a family of Five or more can make up to $103,200 per year. Other area income limits
The program also has geographical limitations. Areas with larger populations such as Orleans Parish do not qualify for this program. The Major areas that do qualify for this program in the New Orleans Metropolitan area are the entire parish of St Bernard which includes Arabi, Chalmette, Meraux, St Bernard. All of the West Bank Jefferson parish (Gretna, Harvey, Terry Town etc.). The entire city of Slidell and surrounding areas. Check if your area qualifies
The USDA Loan program is one of the most paper-intensive when getting approved. Documents such as last 2 years tax returns,w2s, bank statements and four weeks of pay stubs are required. A Two-year job history is required it does not have to be on the same job and students can also use transcripts from college to be used towards the 2-year requirement. There are two ratios that this loan takes notice of. The ratios are called the front-end ratios and back-end ratio. The front end ratio consists of the housing payment or (PITI) this amount in most cases needs to be at or below 29% of your income. The back-end ratio consists of the front-end ratio and all other monthly debt that is typically reported on your credit report. This ratio typically needs to be no higher than 41% of your gross income. There are exceptions to these ratios if you have compensating factors such as reserves high credit etc. Some lenders credit score requirements vary and are as high as 640. Performance Mortgage participates in USDA Home Loans down to 581 and with alternative credit will allow a borrower who has a 0 fico score.
USDA Loans are also known as Rural development loans. The borrower must have two tradelines on there credit profile that has a minimum of a 1-year satisfactory payment history. If tradelines are not present on the borrower’s credit report alternative tradelines can be included such as utility bills, gym membership, cell phone, car insurance and anything else where a 12-month satisfactory payment history can be shown. If the borrower is renting his current resident a 12-month verification of Rent will typically be required.
If you would like to see if you can get improved for a USDA Home loan please apply online it will normally take 8 minutes or so. As long as you have income that will allow for a housing payment we will work with you APPLY NOW