Today’s Tough Housing Market
Because of the recent financial debacle and mortgage meltdown of a few years ago, saving up enough money to purchase a home has become harder than ever. Most lenders today will not even let you in the door if you don’t have stellar credit, not to mention all the closing costs associated with purchasing a home, as well as a substantial down payment. Many lenders today are even requiring up to a 20-30% down payment, not to mention closing costs, insurance, home inspections, just to name a few. For borrowers who can’t afford this large of a down payment, and may not have excellent credit, there are still great home loan options available. And one of these options is the California USDA Loan program.
California USDA Home Loans
If you live in California and you’re looking for some cost saving, non-traditional mortgage options you should take a look at the California USDA Rural development home loan program. This UDSA home loan program is specifically designed for low to moderate income families who are struggling to afford all the costs associated with a traditional home loan. USDA rural home loans will lend up to 103.5% of the appraised value of the home, has no cash reserve requirements, with loans up to $417,000. And one of the best parts about USDA Home Loans in California is that it requires absolutely no down payment. Instead of the considerable down payment most banks are requiring which could cost you tens of thousands of dollars, you can move into the USDA home of your dreams with little to no money upfront.
California USDA Home Loan Property Requirements
California USDA home loans are not eligible to just anyone. In order to qualify you will have to meet certain eligibility requirements including income requirements, above average credit history, and property guidelines. To be eligible for a USDA rural home loan your property must be located in a USDA eligible rural area. USDA eligible rural areas are typically any farm area with wide open spaces, or smaller rural communities with less than 25,000 people.
However, a common misconception about USDA home loans is that they need to be located in only farmlands, or desolated rural areas. The truth is that many USDA eligible homes are actually located in small suburban communities including areas in Riverside County, San Bernardino County, and San Diego County just to name a few. There are excellent USDA eligible homes available right now in small California communities like Cameron Park, California City, Diamond Springs and Orange Cove, to just name a few.
Other USDA Eligibility Guidelines
Because USDA home loans are specifically designed for moderate to low income families, they require that you can’t have an overall household income of more than 115% of the median family income for that area. They also require that you have an above average credit rating of at least 640, however some USDA approved lenders may go as low as 580. You must also be able to afford monthly mortgage payments, have enough income to pay all your other housing costs like utilities and insurance, plus all additional monthly debt you may have previously incurred.
To get started on your USDA Home Loan application for California, fill out the form at the top of the page.
