Moderate income is defined by USDA as the greater of 115% of the U.S Median family income or 115% of the average statewide and State non metro median family incomes or 115/80ths of the area low income limit. In most Texas counties a family of 4 has a base income limit of $82,700 annually. A family of 5 has an income limit of $109,150.  These are the base limits. There are a few counties in Texas that have a higher limit. Please check with us for the income limits in a specific location.   USDA will cross check a borrower’s income level with the last 2 years of tax returns. All household income is included when considering the limit.

If a borrower has enough liquid cash to put 20% down on the purchase, they are not eligible for a USDA loan.

Must be located within a USDA-eligible area.  No exceptions. There is no maximum loan amount for a USDA loan. The program only finances single family homes.

The borrower must occupy the home. 2nd homes or investment properties are not allowed on the USDA program.

USDA allows a 30 year fixed rate term.

USDA requires a 640+ credit score.  Loans below 640 can be done on a case by case basis with manual underwriting.

Must have steady income with a minimum 2 year work history. Schooling can be used to cover some of the period.

USDA’s guidelines have a 29/41 debt to income ratio. This means the full housing payment should not exceed 29% of the borrower’s gross income and the total of monthly obligations (including the new house payment) should be below 41% of the gross income.   However, USDA’s automated approval system known as GUS can approve loans that exceed these limits.

An appraisal is required. Loan amount can be based on the sales price or the appraisal if it is higher than the sales price.  This is a unique feature of a USDA loan.