USDA Loans (US Dept of Agriculture and Rural Development)

USDA loans are often sought after for their 100% financing ability on rural homes that fall into USDA's eligibility areas.  In Lane County, Oregon, if your home is located outside the city limits of Eugene or Springfield, you're probably in an eligible area.  From there, you also have to fall UNDER the maximum allowable household income level, which in Eugene is $78,200 annually for all households of 4 or less and $103,200 for households of 5 or more.  Debt-to-income calculations are more stringent with USDA loans when compared to other loan options such as Conforming, VA, or FHA and the minimum credit score required is typically 620.  USDA loans are not allowed for properties that have any income producing attributes, such as a second unit or a guest house and they will not allow financing for manufactured homes more than 12 months old (in the state of Oregon).

USDA loans require a guarantee fee of 1.00% of the loan amount, similar to FHA's 1.75% up-front mortgage insurance premium or VA's 2.15% funding fee.  USDA loans also require monthly mortgage insurance, similar to FHA loans, however the mortgage insurance premiums are significantly lower than FHA mortgage insurance.

Like most others, USDA loans will require an appraisal.  Appraisals follow HUD (FHA) guidelines for the most part and are a little more stringent than an appraisal for a conforming loan.  

 

USDA loans require a mandatory 3 year wait period after major derogatory events, such as foreclosure, bankruptcies, and short sales.