One of the best yet most misunderstood loans in the USA is the USDA home loan in Pennsylvania. It is also known as the Rural Development Loan. Since this type of loan makes owning a home very affordable for homebuyers, it is becoming increasingly popular. If you are searching for custom home loan solutions, this blog will help you. Read on if you are a prospective homebuyer looking for help with a USDA home loan in Pennsylvania.
What is a USDA Home Loan in Pennsylvania?
The USDA home loans are government-backed mortgages purposely built to assist low and moderate-income families. This is not dissimilar to other loans but has different qualification requirements and benefits.
Just because you apply for the USDA home loan in Pennsylvania, which is available to you by the Rural Development Program and insured by the US Department of Agriculture, it doesn’t mean that you must live in isolation in the middle of nowhere.
Eligible individuals living in or planning to live in rural and suburban areas can apply for USDA loans. To receive the benefits of the USDA loan, you cannot have a home in the metropolitan area. Yes, there are some cities that do qualify. They simply need a small enough population not to be considered “major.”
A USDA loan in Pennsylvania is one of the best available home financing programs because it offers zero down payment and 100% financing. Since USDA loans are guaranteed against default, lenders can take more risks, offering beneficial rates and term conditions. This allows more prospective homeowners to get into new homes when other loan options are not working. It works as a custom home loan solution.
Are You Eligible for a USDA Home Loan?
Since USDA home loans are government-backed, there are some strict criteria that you must meet to qualify. They are:
- You must be a citizen of the USA, or you must have legally permissible permanent housing in the USA.
- You should have 24 months of stable income at the time of the application.
- Make sure to have an acceptable credit history with no accounts to be transferred to the collections 12 months before the application.
- You should meet the USDA income eligibility.
- Your family doesn’t have the proper housing.
No minimum credit score is needed to get a USDA loan in Pennsylvania, but if the score is 640 or above, underwriting the loan will move quicker so that you can get approved earlier.
For Remote Workers
It is crucial for remote workers to note that this USDA home loan in Pennsylvania is specifically intended to assist those who need it the most. You might be locked out if you are a low to moderate-income homebuyer. If you are a remote worker who wants to get out of the city and relocate to a rural area for fresh air, remember there is a maximum income cutoff. Thus, the USDA loan shall not be open to you if the income is too high compared to the average income within the region you plan to buy in. The applicant should not make more than 115% of the median income in the area.
What Homes are Eligible for the USDA Loan?
There are specific requirements about the type of homes you can choose using a USDA loan. It must be in good shape so your family can stay there safely unless you seek custom home loan solutions for a fixer-upper. Also, it must be structurally sound enough to last throughout the terms of the mortgage. The approved appraiser will look at the structure to ensure it is in good shape. The specifications include:
- Accessibility – There must be no hazards that block access to the home. Thus, make sure that you can access the property from the road.
- Structural stability
- Properly sealed roofing with two layers of life remaining.
- Operational heating and cooling systems
- A working electrical system with no wires exposed.
- A working plumbing system with enough water pressure for waste removal
- Properly functioning interior and exterior doors
- Functional windows that are free of cracks, molds, and leaks
Since the USDA home loans in Pennsylvania are backed by the government, they are not only used to buy a new home, but you can also use them in refinancing or renovating your residential property. Once you successfully apply for the USDA loan, you will get funding for home improvements or buying a new property.