USDA Zero Down Guaranteed Loan Available in Tampa Bay

Many Americans aren’t aware of the many different types of government-backed home loans available. The more obscure ones, such as that offered by the United States Department of Agriculture, are definitely not well known. What’s even less well known is that the USDA guaranteed loan is actually available to Florida residents who live in New Tampa, Wesley Chapel, and Land O’ Lakes!

The USDA guaranteed loan allows rural residents to qualify more easily for a home loan if they can afford the loan repayments but don’t have money for a down-payment. Surprisingly, suburban Florida locations New Tampa, Wesley Chapel, and Land O’ Lakes qualify as rural under the loan regulations. If you live in one of these areas, it could be a great way of helping you afford a home.

What are the Main Benefits?

If your moderate income family lives in one of these Tampa suburbs, you definitely stand a chance of benefiting from the USDA loan program. The program was created with the intention of providing guaranteed home loans for people who can afford the monthly repayments, but don’t have the down-payment they need to qualify for a home loan with affordable rates. If the lack of a deposit is the only thing that’s holding you back from getting a mortgage, this might just be the loan program that helps you get there.

The USDA loan provides some other benefits, too, such as the following:

Thirty-year fixed-rate mortgage with reasonable rates
No predetermined limit on how much you can borrow
Flexible credit rating requirements
Mortgage insurance isn’t needed, so your monthly mortgage repayments will be a little bit lower
You can apply for the loan with any lender
It’s guaranteed by the USDA.

Who’s Eligible?

There are a few extra eligibility criteria besides location. You must also:

Be a US citizen, permanent resident, or qualified alien with the legal ability to receive a loan
Be buying a residential property that will be your primary residence (rather than a vacation home or second home)
Be unable to qualify for a conventional loan (not including VA or FHA loans)
Not already own a home in the locality. An exception applies if your existing home is structurally unsound or functionally inadequate (for example, you might qualify if your current home is much too small for your family’s needs).

What about Credit Requirements?

There are some credit requirements, as well, although these are much more relaxed than those you’d get with a conventional lender. If your credit score is higher than 660, your approval is almost guaranteed assuming you meet all other requirements. If it’s between 620 and 660, the process should still run pretty smoothly, too.

If your credit score is lower than 620, you’ll have too meet some additional criteria to qualify for the USDA loan. On the plus side, if you meet all of these, it doesn’t matter how low your credit score is. If your score is under 620, you can not have:

Undergone foreclosure or bankruptcy discharge within the past 36 months.
Been more than 30 days late on any consumer debt payment within the past 12 months
Had two or more late rent payments, any outstanding judgments, or any accounts converted to collections, within the past 12 months.
Any tax liens or delinquent government debts (including student loans). That doesn’t mean you can’t have the debts at all, but you must be keeping up with the required payments.
Any outstanding collection amounts.

There are some income requirements, too, as well as some that concern your ability to repay the loan.

Income must be no higher than 115% of the US median income. Available deductions include care costs for any dependents (including care costs for elderly family members, and costs of daycare).
Monthly house-related expenses (mortgage, taxes, insurance) should total 29% or less of your gross monthly income.
Total monthly expenses (including house expenses and any other debts) should total 41% or less of your gross monthly income.
The ratios are increased to 31% and 43% if the home you’re buying was built after January 2001.

What Type of Property can you Buy?

The loan can be used a few different ways, as long as the property is residential.

Buy or build a new home or existing home
Buy an existing home and make improvements
Refinance an existing guaranteed rural housing loan
Buy a condominium (some restrictions apply)
Buy a manufactured home (the home must be brand new, and bought directly from a contractor or approved dealer)
Cover closing costs, legal fees, title services, and establishment of an escrow account.

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