USDA Mortgages

USDA/Rural Housing Loans In Williamsport

Click to apply online with Principle Home Mortgage

ABOUT

Principle Home Mortgage offers USDA home loans as well as other great mortgage loan products.  USDA/Rural Housing loans are an excellent option for borrowers wanting to lower their upfront out-of-pocket costs, but they may only be used on qualified real estate.  There are no down payment requirements on USDA home loans and allow significant seller assist (if negotiated in your sales contact) towards closing costs.  The limitation of this loan product is that it does restrict income but is a great tool for any home buyer that fits the qualifications in Williamsport, PA or the Lycoming County region.  A USDA/Rural Housing loan is available in forward purchases and refinances.

 

PRODUCT HIGHLIGHTS

  • Seller Assist: Maximum of 6%
  • Agency: US Department of Agriculture/Rural Housing Authority
  • Max Loan-to-Value: 100%
  • Max Loan Amount: No guideline but determined by your debt-to-income (DTI) ratio and maximum qualifying income set by USDA.
  • Mortgage Insurance: Required but is lower than other mortgage products with similar terms.  This amount is set an annual percentage of 0.35%
  • Upfront Mortgage Insurance: Required 1% of the loan amount but can be financed
  • Max Income: 2019 maximum income is set at $82,700 for most areas in Pennsylvania. (see link below for map)
  • DTI Requirement: 41% but fluctuates by lending bank, can be higher based on an automated system approval.
  • Credit Requirement: 640; set by the USDA.  The score can be lower based on automated system approval.  640 is the minimum credit score for a manually underwritten USDA mortgage. 
  • Down Payment Requirement: As little as 0%

 

PRODUCT BENEFITS

  • The USDA backs your home loan: A USDA home loan is guaranteed by the USDA/Rural Housing Authority, unlike other mortgage products.  This guarantee is extended to the private lender in the case of foreclosure, allowing the lender to recover most or all of their investment, resulting in less risk to the lender.  For the borrower, this can increase the chance of obtaining the loan under better terms than other loan programs.
  • No required down payment: USDA home loans are the only home loans that do not require a down payment and are available to the public, unlike VA mortgages.  If the subject property’s sales price is higher than the appraised value, the difference will need to be paid at closing.  Do keep in mind there is a difference between closing costs and down payment.
  • Generally, terms and interest rates are better: To compare USDA/Rural Housing home loans with other loan product types such as conventional or FHA, the borrower will find that USDA home loans typically have lower interest rates and better terms.
  • Lower Upfront Mortgage Insurance and Monthly Mortgage Insurance: FHA requires UFMIP (Upfront Mortgage Insurance Premium) and MIP (monthly insurance premium) for the life of the loan in most cases.  Conventional loans require PMI (private mortgage insurance) if less than a 20% down payment is provided, and it continues until the loan-to-value reaches 78%, or the borrower actively cancels it at 80% loan-to-value.  While USDA home loans do require both an upfront fee and annual mortgage insurance (split to monthly payments), both are less than the FHA program, and typically have lower monthly costs than conventional mortgages.

 

HOW DO I APPLY?

Applying for a USDA/Rural Housing home loan can be simple!  You will need 2 years tax returns and W2s, 2 months bank statements, 2 forms of ID, and 30 days of paystubs.  Self-employed borrowers can expect these requirements to vary slightly.  Please note the income guidelines for a USDA home loan are strict, and while you may meet them, the agency does take into consideration the income of all earning adults who will be residing in the home.  To determine your eligibility for a USDA home loan in Williamsport, PA and the Lycoming County region, reach out to Principle Home Mortgage at (814) 308-0959 to discuss your home financing needs.

 

RESOURCES

Check your area’s income restrictions

Find out if your dream location qualifies

Apply online with Principle Home Mortgage

Visit the USDA homepage for more information on USDA Home Loans