GREAT NEWS! USDA increases income limits
USDA’s new, higher household income limits for its Guaranteed Loan program will be in place for the rest of 2018 and likely most of 2019.
The USDA loan program has two key components to determine a homebuyer’s eligibility:
- The property location, which must be located in a USDA-approved rural location.
- The household income, which must fall below a certain limit. The income limit for households of 1–4 members are now $82,700 for most U.S. locations. For households with 5+ members, the limit is $109,150 for most locations. (High-cost locations may permit income limits much higher.) Buyers can look up their income limits by using the USDA income calculator.
Please note that income to determine USDA household income eligibility (which includes, for example, teenagers’ income and grandparents’ Social Security if they’ll be living in the home) and income for loan qualifying (which includes just the actual loan applicants) are two different things.
USDA Loans offer several advantages for homebuyers:
- No down payment—100% financing for borrowers who meet the eligibility and qualifying guidelines.
- Buyers can include their closing costs into their mortgage or have the home seller pay.
- Low fixed interest rates.
- Low monthly mortgage insurance costs (PMI) compared to FHA loans, or low down payment conventional mortgages.