Here are 7 requirements that you need to meet to qualify for a USDA Home Loan.
- Property Location: USDA is a rural development loan, means the property has to be either in a rural area or sub-urban area with population less than 20,000 for major part.
- Citizenship or Residency Status: USDA requires you to be U.S. citizens or permanent residents.
- Federal Program Eligibility: USDA requires you to NOT have any criminal convictions or you should not have been involved in fraudulent activity.
- Credit Score: Required FICO score is 640+ in ideal case scenario. Borrowers with lower credit score might need to furnish more details on a per case basis and need to justify their repaying capacity with related income proof etc.
- Steady Income: It is required that the borrower show proof of steady income over a period of last 2 years.
- Housing Ratio: The mortgage payment including insurance and other expenses cannot exceed 29% of your monthly income.
- Debt Ratio: Debt-to-income ratio for USDA loan cannot exceed 41%, although in some cases little relaxation is permissible.
For more details on requirements you need to consult USDA site here.