The USDA Guaranteed Home Loan Program in South Plainfield is backed by the USDA – the United States Department of Agriculture.
It is a TRUE no money down home loan in South Plainfield. Many people who take advantage of this program are able to get into their homes with little to no money out of their pocket.
BUT, there are several USDA Loan eligibility requirements in South Plainfield that you need to meet in order to take advantage of this home loan program.
USDA Loans in NJ Requirements Explained:
The first requirement is that you cannot be a current homeowner.
If you already own your home but are planning to sell it, then you are still eligible in South Plainfield! You just need to have your existing home soldBEFORE we can close the loan for your new home.
The next requirement is that your total annual household income cannot exceed the limits set by the USDA.
These income limits are based on market area and family size.
Another requirement is that you cannot have defaulted on a USDA loan in the past.
This means that if you’ve had a past USDA loan that has gone in to foreclosure, you unfortunately aren’t eligible.
How to take advantage of USDA Loans in NJ:
To take advantage of this program, the home has to be located in an eligible rural area.
But guess what, rural does not necessarily equal country! Homes do not have to be in a country setting.
In fact, there are many areas where entire counties and cities qualify for this program. The property has to meet minimum USDA Loan property standards.
The home must be in satisfactory condition, and this loan cannot be used to finance any sort of income producing property.
That means mini farms, and properties with farm acreage are not USDA Loans eligible.
2019 USDA Loan Eligible Areas in NJ: Map to Eligibility
So Steve, What are the requirements for the USDA program? So USDA has a few interesting requirements First of all, you'll need to have at least a 580 credit score Some lenders require a 620 credit score Your household income has to be under the county maximum Like a lot of down payment assistance programs This is based on family size So 1 to 4 is one category and then 5 and above is a higher threshold for qualifying What's unique about this one is the home has to be within a designated area. So, Typically what that means is. NOT within a metropolitan area So within our area here (Riverside county) Our local cities around her don't qualify But we only need to go 10 miles away to where there's an open area where there's Several homes that qualify. USDA stands for United States Dept of Agriculture But it's NOT a farm loan. Specifically, they don't finance this program for farms. It has to be a Single Family home without a barn structure on the property. and then it also has some home price limitations. The Threshold is a little bit lower than say an FHA loan for the loan limits. Ok, and how does this program differ from other Down payment programs? So it's different because it's not really a down payment program but it allows financing up to a 100% of the purchase price And it's interesting because you can actually use this program with 1 or 2 of the other programs. If you need closing cost assistance But, what's unique it's a 100% Financing So you don't need a 2nd or a 3rd lien on the property. Your interest rates are typically lower Than if you combine it with a down payment assistance programs And you don't have to repay any down payment assistance It has a monthly factor It's like mortgage insurance upfront It's financed at a monthly component Much less than FHA So if you can qualify for this program It's better than FHA And As I mentioned, rates and payments Are typically lower on this program So USDA is really a great program. Great! And on average How much does the home buyer have to come in with out-of-pocket? So Again, we are financing the whole loan Purchase price up to 100% So the only thing remaining is then the closing costs Typically, plan on around 3% of the purchase price for funds to close. The question there then becomes, Well, Where does that come from? Typically, we ask the seller to cover those costs And if we can get the seller to cover 3% Then, the buyer may only need to come in with an earnest money deposit. And they may even get most or all of that back. If the seller is covering all the fees. One unique feature about USDA Versus all other loans is that if the home appraises for more than the purchase price We can finance the closing costs Up to that appraised amount So, no other loan I know that we can actually finance the closing costs. on that type of loan What type of home buyer is this program ideal for? So certainly those that don't have access to money for a down payment Anyone that wants to live that doesn't have to live within a metropolitan area because, again, the house has to be in an area that is not in a high densely populated area It's also suited well for people who have some credit issues and anybody that qualifies for this program would definitely be better served than going FHA so those type of people. And besides the Area restrictions are their any other property restrictions? So property restrictions are going to be similar to FHA They'll do manufactured homes They'll do homes with Casitas So no real other restrictions. Just if it conforms to the FHA guides then it should qualify for USDA There's a couple little quirky things That you don't run into very often Like you can't actually have a barn on the property It definitely can't be for agricultural purposes It has to be for residential purposes Ok Great! Thanks Steve.
Good afternoon. I'm Ellen Mitchel with the Prestige Estate Team of REMAX Allstars here in South Florida. I'm here today with Will Caban from Cross Country Mortgage. Thank you for having me. Thank you for coming. It's my pleasure. Good to be here again. We did a video recently about VA loans which is something that William specializes in andwe got a lot of questions. The question that we got the most was: Howdoes a veteran and non veteran applicant affect a VA loan?So for example I'm a non veteran dating a veteran and we want to purchase a property togetheror I'm a veteran and I want to purchase a home with my mother or father or siblings thatare not veterans. So how does that work and does it work?Absolutely. So to answer your second question first, yes, it does work. It is possible to actually do a vet/non-vet loan. There's just a few caveats when doing a vet/non-vet And one of the more important aspects of a vet/non-vet loan is: 0 percent is no longeran option. Yeah. So you have to and here's the reason why. One of the big benefits of being a veteranand doing the VA loan is that you get something called the Certificate of Eligibility. And the Certificate of Eligibility is something that's earned and depending on the amount ofeligibility that you have that is what substantiates you to be able to have 0 percent down. So when you have 0 percent down up until a loan amount as of this recording which is November2018 it's $453,100 in the state of Florida. Anything over that then you would have tobring a dollar you know a downpayment for the difference between what the maximum loanis and whatever that loan amount is. Its completely different with vet/non-vet loan. The vets can have the portion of their loan that's covered 100 percent and then half ofthat loan which is the responsibility for the non-vet would have to come out of they wouldhave to come out of pocket 12 1/2 percent in most cases. And were assuming that the loan is gonna be under $453,100. In that situation the down payment is significant for most people right?There's still some benefits when you look at 12 and 1/2 percent down because VA loans traditionallyhave lower interest rates there's no mortgage insurance attached to it even if its a vet/non-vet loan. So exploring that as an option is definitelysomething that most people can take advantage of. Now with that being said the second big item that most people need to be aware of is: Anyvet/non-vet loans have to be vetted out by an underwriter by the VA themselves. There are no exceptions to that rule whatsoever. So when we look at our turn times and we lookat you know what we can do from a lender's perspective we lose a little bit of that control. But the VA always wants to make surethat they're turning around loans as quickly as possible. So if it ends up being a vet/non-vet loan it is absolutely something that we could do. Just those two major caveats that we need to be aware ofRight. Well I think the question and answer has prompted a lot more questions. So if you have any questions, please post them below and we will be happy to answer them. William Caban Cross Country Mortgage. He is the person to contact for this. Thank you so much and have a great day. Take care. Bye.
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