USDA Guaranteed Loans

Offered through the United States Department of Agriculture

At Beam Lending Group, we offer USDA Guaranteed Loans.  Note that these vary slightly from a USDA Direct Loan which we do not offer.

USDA loans are a good choice if you meet the following requirements:

  1. Home shopping in a USDA qualified area. USDA loans are designed to be used in rural areas.  Home buyers that want to live in the big city need not apply!  J  We can help you determine if the area you’re shopping for a home is in a USDA eligible area.
  2. Low to moderate income. Home buyers have to fall within certain income requirements when getting a USDA loan.  The limits are determined based on the location of the property.
  3. Very low DTI. The USDA has some of the strictest requirements when it comes to a debt-to-income (DTI) ratio.  They typically like to see your total ratio below 41% (meaning your debts as a percentage of your income can be no more than 41%) and your housing ratio (meaning your mortgage payment as a percentage of your income) needs to stay below 29%.

A few USDA loan facts:

  1. USDA loans have an upfront guarantee fee. USDA loans require borrowers to pay an upfront guarantee fee.  That fee is typically added to your initial loan amount.  Currently, that fee is 2.75% of your loan amount.  That means if you want a loan for $200,000, the initial loan amount with the added mortgage insurance will actually be $205,500.
  2. USDA loans have an annual fee. USDA loans charge a set annual fee that you pay monthly as part of your payment.  Currently, that fee is 0.50%.
  3. USDA loans don’t require a down payment. The most appealing part of a USDA loan for most borrowers is that they do not require a down payment.  Although they have an upfront and annual fee, they are still a better deal than an FHA loan that has similar fees but requires a down payment.

 

Please consult one of our friendly loan officers today to help you determine which loan option is the best for your particular situation!  We’ll do our best to be “The Bright Spot in Mortgage Lending!”