USDA Home Loan for Florida Properties

The USDA home loan or (aka – 502 Direct Loans) for Florida residential buyers are designed to help the low-income or “very low income” home buyers.  All applicants can finance 100% of the purchase price of their new home and the mortgage payments are adjusted according to the household’s income.

The purpose of the USDA Florida home loan is to help low-income borrowers purchase homes in rural areas.  The mortgage can be used to build, repair, renovate or relocate a home, or to purchase and prepare site, including providing water and sewage facilities.

How can you qualify?  Borrowers/applicants for direct loans must have very low or low incomes.  This is defined as below 50% of the are median income; low income is between 50% and 80% of AMI-moderate income is 80-100% of AMI.  Families must be without adequate housing, but able to afford the mortgage payments, including taxes and insurance, which typically are within 22% to 26% to enhance repayment ability.  Applicants must be unable to obtain credit elsewhere, yet have reasonable credit.

USDA mortgage loan terms are for up to 33 years (360 months) and 38 years (456  months) for those with incomes below 60% of AMI and who cannot afford the 33 year-term.  The mortgage rate is based on the Government’s cost of money.  However, the interest rate is modified by payment assistance subsidy.

What are the requirements of the home?  The housing must be modest is size, design, and cost.  Modest housing is property that is considered modest for the area, does not have market value in excess of the applicable are loan limit, and does not have certain prohibited features.  Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards.  Manufactured housing must be permanently installe3d and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards.

• No mortgage insurance
• No Cash Reserve Requirements
• 102% of Appraised Value to cover closing costs
• No Cap on mortgage amount other than the Appraisal (plus 2% USDA-RD Fee)
• 6% Seller Concessions allowed to cover closing costs
• Gifts allowed and DO NOT NEED to come from a relative
• Try USDA before FHA because it requires not down payment
• minimum 620 credit score on all borrowers for NO MONEY DOWN
• No Declining Markets (open to all counties)

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