The USDA Guaranteed Home Loan Program in West Milford is backed by the USDA – the United States Department of Agriculture.
It is a TRUE no money down home loan in West Milford. 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 West Milford 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 West Milford! 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.
Are you aware of boththe pros and the cons of VA home loans? (upbeat music) Hey everybody, I'm Nick Steffl with the Whissel Realty Group and today, I'm here to talk to you about both the pros and thecons of VA home loans. VA of course stands for Veterans Affairs as in the Department of Veterans Affairs and the VA loan is oneof the best benefits when it comes to having the GI bill which has been around ever since 1944 for our active suit duty service members and our veterans. So when it comes to the VA loans, let's talk about boththe pros and the cons when it comes to using your VA loan. First of all, when itcomes to the VA loan, let's talk about the 0% that you can put down on a home. A lot of home buyers are frustrated when it comes to the down payment that they have to put on a home but with the VA loan, you can put down 0% and get into that home that you love. Secondly when it comes to your VA loan, you're able to get typicallymuch easier qualifications when it comes to getting prequalified. Usually in your conventional loans, they have higher standards. With the VA loan, it's abit easier to get qualified. And also, you're going tohave a lower interest rate on your VA loan than you typically would on a conventional loan. Thirdly, when it comes to your VA loan, one of the benefits is going to be private mortgage insurance. Private mortgage insurance is something that you typically have to pay if you put less than 20%down on a conventional loan. But with the VA loan, it doesn't matter what amount that you put down, it could be 20, 19, 15, 0% down, and you never have to worryabout private mortgage insurance which saves you hundreds ofdollars every single month. So let's talk about the disadvantages when it comes to using your VA loan. First of all, with your lower down payment that you're going to have, you're also going to havetypically a higher principal on that loan as well and with that, you're going to have alittle bit more interest over the life of that loan. Secondly, when it comesto the disadvantages of your VA loan, you have a funding fee, a one time funding feethat you have to pay for this VA loan andthat's usually going to go from zero to 3% of the value of the loan depending on your military service history and the size of your down payment. Finally, when it comesto the disadvantages of using your VA loan,you're going to have a limit on how much you can borrow. So if you're trying to purchasea 5 million dollar mansion here in San Diego, that'susually not going to work with the VA loan. But, if you're looking for a home that you and your familydo need at a lower price, that's something that we can use and get you into thathome that you do need. So if you have anyquestions about the VA loan or any kind of other loan types, give me a call 619-933-7155. I would love to connect you with one of the lenders that we work with. Have them get you approved and once we do that, youand I will go searching for that perfect home and getyou the home of your dreams. (upbeat music fades).
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