We love the USDA Home Loan Program. It’s a zero money down program available in every county of North Carolina. To qualify you just need decent credit, the house must be in the “eligible footprint” from USDA, and you need to be under the Maximum Household Income for the County you are purchasing in. We get questions regarding how underwriters look at / evaluate Maximum Household Income Calculations for USDA Home Loans NC. It’s pretty easy:
Household income is defined as the gross annual income of any person who is expected to live in the residence being financed.
So let’s say you live near a college or University, and your Nephew is going to live with you while he is in college. Can the fact that he now lives with you make your household OVER the 4 person household? Yep.
What if he works part-time – is THAT income included in the maximum income for your household? Unfortunately, it could be. So could your mom’s social security payment if she lives with you full-time. Understand that USDA is looking for 2 different parts of income. First, they want to know if the income that is received in the home exceeds the maximum income for that area. Second – USDA wants to see if the income received in the home can be considered “reliable” and therefore used to qualify the borrower for the mortgage loan.
How to Calculate Income For USDA Home Loan Program in NC
The guideline says that it’s ALL of the income for the household, including income received by any household member who is 18 years of age or older (except a full-time dependent student).
What if the “student” will not be on the loan? The income will be counted in the maximum income numbers, even if they will not be liable on the mortgage, and that TOTAL household income cannot exceed the limits by household size.
The same is true if you have a parent living in your home, or anyone else… I just used Student in the example because I just got a call about it.
When you search for the maximum income limit for your county… you might not see it on the list, which can be confusing. In North Carolina we have portions of our State that are under a “designated” MSA… this means that if you live near a Metropolitan Area (like Raleigh) you might not see your County listed for Maximum Income Limits on the Table – you would look at Raleigh.
Basic Qualifying Guidelines
- Must be under the maximum income limits for the county
- Must have at least 2 credit scores over 620
- Must meet all other USDA Home Loan guidelines
- Must be NC resident / you can not add a non-occupying co-borrower on a USDA Home loan like you can on a FHA loan.
- 3% Closing Cost Assistance available if you qualify
- No additional Insurance requirements
- Tax Credit can be issued if you qualify
You can also use the NC Affordable Housing / First Time Homebuyer program with a USDA Home Loan. The income cap on that program is $85,000 across NC.
Have questions about Maximum Household Income Calculations for USDA Home Loans NC, or Programs for Single Moms available in NC? Call Steve and Eleanor Thorne 919 649 5058 – we’d love to give you a quote for today’s best mortgage rates!Steve and Eleanor Thorne 919 649 5058 Connect with us on Facebook!