I'm looking to make a future home purchase via USDA- Can you tell me what the process is, and if there are special guidelines I need to follow?
Please note, my credit was somewhat mediocre, but with a divorce and some recent credit issues as a result of the divorce, and child support, my credit worthiness may have tanked.
Answers | 2
USDA loans are a great option especially because you can obtain 100% financing, but here's the catch (and the critical guideline) - The property must be within the "eligible" USDA zone in order to purchase using USDA. For your information, here is the portal where you can check this (though it may be easier to have a lender work this out for you as I do with my clients) -
There will be a "Guarantee Fee" as part of this loan that goes to USDA as well as mortgage insurance monthly on the loan. The mortgage insurance will be there for the life of the loan.
Underwriting guidelines are more flexible than conventional loans and your credit score, though it is always important, will not have as much effect on the interest rate as on a conventional loan.