USDA Home Loans NC are very desirable because they do not require you to make any down payment. The “barrier” to enter into home ownership is, therefore, very low. You do not have to be a first time home buyer to use the program, and in certain cases, it’s OK to own another property.
Adjusted Income USDA Home Loan NC
There are two income limits that the USDA Home Loan NC or USDA Guaranteed Rural Loan Program is looking for to qualify for a mortgage in NC. One income lets us show that you are under the income limit set for the county you are buying a house in. The other income requirement looks at the Qualifying income for the loan.
The USDA Guaranteed Home Loan Program requires that the combined income for all members of the home be added together to come up with the “Maximum Household” Income. This income includes folks who live in the house, but will not be on the mortgage loan. That total income can not exceed the maximum limit set by USDA Home Loan NC requirements for the county in which you want to buy a house.
The USDA Home Loan NC requirements ALSO allow us to make adjustments to that total income. Many loan officers are not aware of these adjustment allowances, and might tell you that your income is over the limit, when you really qualify for the program.
This is the applicant’s eligibility income less the total of any of the following deductions applicable to the loan. Income from all household members must be included in the total adjusted income. This adjusted income must not exceed 115% of the median household income for the area. (see spreadsheet).
Allowable Deductions to Determine “Adjusted Income”:
Member of Household
Amount of Deduction
Each minor child under 18 years of age
Each disabled or handicapped individual who is not the applicant or co-applicant
Each full time student 18 years or older
Each elderly (62 years of age or older) or disabled applicant
Medical expenses for any elderly family member
Total that exceeds 3% of gross annual income
Child care expenses for children 12 years old or under
Actual cost of care, supported by full documentation of cost
It’s important for some families who are so very close on these ratios to understand what USDA Home Loan Underwriters are going to COUNT in the income ratios – and to what lengths we have to go to make our “case.”
We recently made a loan to a borrower who worked in 2013 and 2014 as a self-employed Computer Tech. In February of 2015, the borrower went to work full-time in the Tech field, making an annual Salary of $72,000. The maximum income for the County he wanted to buy a house in is $76,000.
The issue came not because we needed to reduce his income based upon Child Care Expenses, which we could easily do – it was proving that he was no longer working part-time as a Technology Guru on a part-time basis. It’s September, and more than one Underwriter felt that we would need to see his 2015 tax returns to be sure.
His income from one company in 2014 was $8,942 – which would clearly take him over the income limit for the county.
He actually dissolved the two companies he was working with, and provided us with bank statements for the year showing that he had no income from anywhere else but his employer. This was an extreme case – but it goes to show that we sometimes have to go to extreme measures to show if you qualify for the USDA Home Loan with no down payment mortgage.
We also offer the NC First Time Home Buyer Program that gives you additional benefits, and for a limited time, the $15,000 Mortgage Grant that can cover closing costs and PMI on your mortgage! The First Time Home Buyer programs we offer are NOT available from all lenders in our state.
You can also use the Mortgage Grants and the USDA Home Loans with the Mortgage Tax Credit Program to purchase a home in NC!
More Information on Adjusted Income For USDA Home Loans NC please call Steve and Eleanor Thorne, 919 694 5058 we do TONS Of USDA home loans in NC.