Texas USDA Loans Keep Rural Communities Alive and Thriving
Although it is the quasi-public entities Fannie Mae and Freddie Mac that are best known for providing financial support to home buyers, there are other important sources of government assistance. Under the terms of a decade-old mandate, the United States Department of Agriculture, for example, runs a number of programs that make it easier for people to buy a home outside the big city limits. Texas USDA home loans can help attain home ownership.
Given the sprawling size and the low overall population density of Texas, USDA Guaranteed loans are a realistic option for many people in the State. As with all federally sponsored loan programs, USDA loan requirements are fairly specific and inflexible, although many borrowers find them to be easy to live up to.
The USDA’s Single Family Housing Guaranteed Loan Program
The most popular and accessible of these options provides guarantees to private-sector lenders who supply financing to home buyers. Like the support provided by Fannie Mae and Freddie Mac, the USDA home loan program reduces the risks that lenders face when extending credit to buyers who might otherwise be considered marginal.
Buyers who wish to participate in the program must meet income eligibility standards. These limits vary from region to region and is county specific, but for Texas USDA loans, they typically mean coming in under 115% of the Area Median Income (AMI) averages for a family of a given size.
Otherwise, buyers must demonstrate U.S. citizenship or residency status, maintain eligibility for federal programs in general, and exhibit basic credit worthiness. The USDA Guarantee Home Loan extended under the program can be used for the purchase of new properties or existing properties, the refinancing of existing mortgages, or for specified household improvement projects, including modifications designed to support residents with disabilities.
Section 502 Direct Home Loans for Single Family Residences
Another of the agency’s programs sees it extending direct support to qualifying home buyers. Unlike the more common Texas USDA Guarantee loans that have the agency backing private-sector creditors, under Section 502 it provides loan-backed, mortgage-payment subsidies to needy families offered directly by USDA called USDA Direct.
This program is designed to help qualifying borrowers making 80% or less than the Area Median Income (AMI). All applicants must meet all the standards imposed by the agency’s Direct loan program, along with the other basic qualifications. Property eligibility standards are stricter, with features like swimming pools or excessively luxurious appointments resulting in disqualification.
Although there are certain bureaucratic barriers to be navigated by those who wish to participate in the programs, most find that the generous terms and overall accessibility of these Texas USDA loans make them well worth investigating.
The USDA Home Loan Program is a true 100% financing program for those who qualify. For additional information, please contact our Home Loan Specialists at 281-949-7218.