USDA is a government backed program that allows zero down payment on homes that are in a designated rural community for families earning less than a certain income. A majority of Washington State single family residences (homes and condos) qualify...of course if you live in metropolitan areas like Seattle or Bellevue, odds are your home will not. To qualify, families must be without "adequate housing" (may not own a home or adequate home), must have reasonable credit history and be able to afford the mortgage (29/41 is the debt to income ratio guidelines).
Income limits vary by county and the entire household income is considered (not just the primary borrowers or those borrowers on the mortgage) for determining if the income meets the guidelines. This is separate from income considered for "debt-to-income" ratios. USDA loans allow incomes up to 115% of the median income for the area. Income limits vary on household size from 1-4 person or 5-8 person.
As of the publishing of this article, in Washington, the income limits by county are:
- King and Snohomish Counties: 1-4 Person $92,600 | 5-8 Person $122,250
- Island County: 1-4 Person $89,550 | 5-8 Person $118,200
- Kitsap County: 1-4 Person $85,700 | 5-8 Person $113,100
- Thurston County: 1-4 Person $85,100 | 5-8 Person $112,350
- Clark County: 1-4 Person $82,800 | 5-8 Person $109,300
- Pierce County: 1-4 Person $81,450 | 5-8 Person $107,500
- San Juan County: 1-4 Person $78,050 | 5-8 Person $103,050
- Whatcom County: 1-4 Person $76,850 | 5-8 Person $101,450
- Benton and Franklin Counties: 1-4 Person $75,750 | 5-8 Person $100,000
- All other Washington counties: 1-4 Person $74,050 | 5-8 Person $98,650
You can check current USDA income limits by visiting the USDA site (clicking here)...be sure to click the "guaranteed" option. Income limits can and do change. You can also use USDA's income eligibility calculator which will factor in deductions to income, select the "guaranteed" results (not "direct").
Income used to determine if a family is under the household income limits includes all those (18 years and older) who will be living in the home regardless of whether or not they're on the mortgage. Incomes of children over 18 who working AND who are full time students are not factored.
Once you've determined that you meet the household income limits, the next step is to see to see what communities in your area are eligible for USDA financing. You don't have to go too far from Seattle or Bellevue to find homes that do qualify for this type of mortgage. Using the USDA site, under "Property Eligibility" click "Single Family Dwelling". From there you can either enter a specific address or click on the map to narrow down your search.
Sellers and real estate agents who are working in neighborhoods that qualify should be sure to include this program as an option they'll consider for financing on their offers.
I'm pleased to offer USDA financing as an option for borrowers who meet the criteria since there is no private mortgage insurance and the program is a 30 year fixed rate. If you have any questions regarding USDA or other mortgage programs for financing homes located anywhere in Washington State, please contact me, I'm happy to help!
