All About USDA Loans When Buying A House In Atlanta

Everything You Need to Know About USDA Loans When Buying a House in Atlanta

Are you planning to buy a house in Atlanta, but worried about not having enough money for a down payment? USDA loans can be the perfect solution for you! In this article, we will discuss everything you need to know about USDA loans when buying a house in Atlanta.

What are USDA Loans?

USDA loans are home loans guaranteed by the United States Department of Agriculture (USDA). These loans are designed to help people in rural areas buy homes by offering low-interest rates, no down payment, and flexible credit requirements. The loans are only available for homes located in designated rural areas and some suburban areas.

Benefits of USDA Loans

There are many benefits of USDA loans when buying a house in Atlanta, including:

No Down Payment Required

One of the biggest benefits of USDA loans is that they don’t require a down payment. This means that you can buy a house without having to save up for a large down payment.

Lower Interest Rates

USDA loans offer lower interest rates compared to conventional loans, which can save you thousands of dollars over the life of your loan.

Flexible Credit Requirements

USDA loans have flexible credit requirements, which means that you may be able to qualify even if you have a low credit score.

Closing Costs can be Rolled into the Loan

USDA loans allow you to roll your closing costs into the loan, which means that you won’t have to pay them upfront.

No Prepayment Penalty

USDA loans don’t have a prepayment penalty, which means that you can pay off your loan early without any additional fees.

Eligibility for USDA Loans

To be eligible for a USDA loan when buying a house in Atlanta, you need to meet the following criteria:

Property Location

The property you’re buying must be located in a designated rural area or a suburban area that meets the USDA’s population requirements.

Income Limits

Your income must be below the USDA’s income limits for the area where you’re buying the home. These limits vary depending on the location and size of your household.

Credit Requirements

While USDA loans have flexible credit requirements, you still need to have a good credit history to qualify.

Employment History

You need to have a steady employment history for at least two years to be eligible for a USDA loan.

How to Apply for a USDA Loan

Here are the steps to apply for a USDA loan when buying a house in Atlanta:

Step 1: Find a USDA Lender

You can find a USDA lender in Atlanta by visiting the USDA website or asking for recommendations from friends, family, or a real estate agent.

Step 2: Pre-Qualify for the Loan

You need to pre-qualify for a USDA loan by providing your lender with your income, employment history, credit score, and other financial information.

Step 3: Get Pre-Approved for the Loan

Once you’re pre-qualified, your lender will help you get pre-approved for the loan by verifying your income, employment history, credit score, and other financial information.

Step 4: Find a Home

With your pre-approval letter in hand, you can start looking for a home in Atlanta that meets the USDA’s location requirements.

Step 5: Finalize the Loan

Once you find a home, your lender will help you finalize the loan by completing the necessary paperwork and closing the loan.

USDA Loan Requirements

There are, though, some fairly exact requirements for buying a house with a USDA loan. These are . . .

Location – “If the city you’re buying a home in has fewer than 10,000 residents, your home should meet the USDA definition of a ‘rural area.’ Unincorporated areas also qualify. Some municipalities with up to 20,000 people will qualify for USDA financing.”
Income – To be eligible, you must have a household income below the USDA limits for the specific area. “The limit is 115% of your area’s median income. If your area’s median income is $50,000, you can’t earn more than $57,500.”
Property – USDA loans are for primary residences only (though this can include new manufactured homes).

Qualifying Criteria

Buying a house with a USDA loan also means that you’ll have to meet certain qualifying criteria, such as . . .

A credit score of at least 640 (which is slightly higher than that required for conventional loans at 620)
A debt-to-income ratio (DTI) of no more than 41% (which is a little stricter than the DTI required for most conventional loans and certainly FHA loans)
A provable record of at least two years of steady employment

The good news, then, is that “[i]f you meet all of those requirements – and if your home purchase price does not exceed the home’s appraised value – you could buy the home with no money down.”

FAQs

Can I use a USDA loan to buy a house in a city or urban area? No, USDA loans are only available for homes located in designated rural areas and some suburban areas.
How much can I borrow with a USDA loan? The amount you can borrow with a USDA loan depends on your income, credit score, and other financial factors. However, the maximum loan amount is generally limited to the appraised value of the home.
Do I need to be a first-time homebuyer to qualify for a USDA loan? No, there are no specific requirements that you must be a first-time homebuyer to qualify for a USDA loan.
Are there any fees associated with USDA loans? Yes, there are some fees associated with USDA loans, such as an upfront guarantee fee and an annual fee. However, these fees are generally lower than those of conventional loans.
How long does it take to get approved for a USDA loan? The approval process for a USDA loan can vary depending on the lender and other factors, but it generally takes around 30 to 60 days.

Keller Williams in Cherokee County Ga

Keller Williams in Canton,

Keller Williams in Woodstock, Ga