About USDA Loans
When buying or refinancing a home, there are many benefits for those eligible for a USDA home loan. Sponsored by the U.S. Department of Agriculture, a USDA loan is a mortgage that offers benefits for those wishing to purchase a home in an eligible rural or suburban area. These loans have several unique qualifications, like household income limits and location requirements that set them apart from other products. But they can be a great option for individuals looking for $0 down mortgage options. Questions? Feel free to contact a Mutual of Omaha Mortgage Wholesale Account Manager or give us a call at 1-844-499-1173.
USDA Loan Features
- 0% down payment
- FICO requirements: 620 and above (Approved GUS/Manual UW (refer to 3555 for manual guide))
- Lower credit score requirements
- Eligible properties must be located in a rural area as defined by USDA Rural Development and cannot produce income
- No reserve requirements
- Minimum of two investors required for all loans. When only two investors are available the pricing for each investor must be within 50 bps of each other. For example, one cannot be priced at 100 and the other at 98.25 if those are the only two available investors.
- Minimum Property rating of C4 or better. Properties rated as a C5 are not acceptable.
- Loans with LTV’s greater than 80% require escrows unless not applicable by state law
- Paying off loans in Chapter 13 NOT ALLOWED Extenuating circumstances not allowed/considered
- POAs not allowed on cash out refis
- Single-Wide manufactured homes not allowed
- Manufactured homes in flood zone not allowed
- 1040s: Required when using any income specifically on 1040 (self-employed, cap gains, rental, etc).
- W-2 transcripts required unless income validated through Work # WVOE
- Required on all government loans
- Use of WVOE in lieu of pay stub only allowed if income is validated through W-2s or transcripts (some sort of validation of income apart from WVOE is required)
- Maximum loans made to one borrower the lesser of 6 loans or $2,000,000 in total exposure
- If buying multiple investment properties borrower must demonstrate a history of managing rental properties
- Maximum acreage of 50 acres
- Non-Owner loans (second homes or investment properties) where borrower does not own primary residence are not allowed