Of all the home loan programs available through Fairway of the Carolinas, one stands out above the rest for its flexible requirements. Want to know which it is? Yeah, we thought so. It’s the ever-popular, government-backed USDA loan, which is available to homebuyers in various places throughout the country. These areas include certain parts of North Carolina and South Carolina – both service areas for Fairway of the Carolinas. In just a minute, learn about USDA loan requirements and whether this might be the type of loan for you. But before we get into that, first up is a quick reminder of why USDA loans are so popular.
Why a USDA loan?
If you’re looking to keep some money in your pocket, a USDA loan is the way to go. First, it’s one of the few home loans that doesn’t require a down payment. No, it’s not too good to be true. Yes, you read that correctly: No down payment required. Secondly, you may be able to roll closing costs into your loan rather than paying them at closing. If you find out a USDA loan is right for you, ask your Fairway of the Carolinas mortgage adviser about this. Finally, USDA loans also have the benefit of being available to repeat homebuyers – not just first-timers.
One last note on the perks that come with USDA loans. While there’s no absolute minimum credit score for this type of loan,most lenders will require a 640 or greater. But even when it comes to credit score, there’s at least some flexibility with USDA loans. And you can always work to improve your score if it’s not where it needs to be.
USDA income requirements for North & South Carolina
Now to the real crux of the matter: Not everyone in North and South Carolina is eligible for a USDA loan. But you just might be. Your eligibility depends on meeting just a few basic USDA loan requirements. One is that you can’t have a household income that exceeds 115 percent of the median household income in the area where you live. For example, if families in your area bring in $50,000 per year on average, your total annual household income can go up to $57,500 but no more.
However, overall income limits are higher for a household of 5-8 people than a household of 1-4. The current standard USDA loan income limit for a household with four residents or fewer is $91,900. That’s up from $90,300 in 2020. The 2021 limit for households pf between five and eight people is $121,300. That’s a jump from $119,200 last year and even bigger jump from the current income limits for a smaller household.
Other USDA income requirements for North & South Carolina
Some USDA loan requirements in North Carolina have nothing to do with income levels. For example, you must be a U.S. citizen, U.S. non-citizen national or qualified alien. You also must plan to treat the home for which you are seeking the loan as your primary residence. Last but certainly not least, you also must live in an area of your state – in this case, North or South Carolina – where USDA loans are available. USDA stands for U.S. Department of Agriculture, so perhaps it will come as no surprise that these loans only work for homes in rural areas. The good news is you don’t necessarily have to live in the boondocks to be USDA-eligible. You do, however, have to be a certain distance from the closest major city. More specifically, your area can’t have a population of more than 50,000 residents.
To find out more about USDA loan requirements and how to apply for a USDA loan, click here. Also, contact us today at Fairway of the Carolinas to get started. Even if a USDA loan isn’t the one for you, we have plenty of other options that might be. Let’s connect as soon as you’re ready!