The USDA Home Loan NC Program has been fixin’ to get ready to change the USDA Loan Eligibility Map in our state for two years. The potential changes to the USDA Loan Eligibility Map for Burlington and Mebane NC have currently been delayed until the end of September 2020. Why is this such a big deal? Because USDA Home Loans are no down payment required, low closing cost loans available to anyone who is willing to live in a more “rural” NC setting.
The Three Items Needed To Qualify for USDA Loan in Burlington NC
To qualify for a USDA Loan in Mebane NC or Burlington NC you need to have a household income lower than the limit in that area. The current USDA Home Loan Income limit for a family of four in the Burlington area is $78,200. For those with a household of 5 or more, the income limit is $103,200.
The income limits are based upon the county you are buying a home in – therefore, if you are in the Alamance County side of Mebane, you would be tied to the same “Burlington NC ” USDA Income Limits, however, depending on where the property is located – you might fall under the Durham and Chapel Hill Income limits, which are a bit higher in Orange County. Therefore, if you are buying in the Mebane / Orange County area – please call us so we can look at the address and let you know what the income limits are 🙂
You need two credit scores over 600 – and any student loans that are in deferment will need to have an established payment amount, or we will have to count 1% of the balance as a payment. Loans with a middle credit score below 640 are manually underwritten, and those loans will be looked at more closely (read you need some off setting factors).
The last thing you will need to qualify for a USDA Loan in Burlington NC or a USDA Home Loan in Mebane NC –>> you must buy a home that is within the USDA Loan Eligibility Map for Burlington NC. Beginning with these proposed USDA Loan Eligibility Map changes, Mebane NC will be one of the areas that becomes “in-eligible.” (see map below).
Here’s the CURRENT USDA Loan Eligibility Map of the Burlington / Mebane NC area. The “tannish blob” does not qualify for USDA Home Loan financing.
Here’s what the “proposed changes” will look like for Burlington, and then the map after that is the Mebane NC USDA Loan Eligibility Map, based upon the FUTURE changes that are currently slated for the end of September 2020. As you can see, it’s a pretty significant shift.
As you can see from these USDA Loan Eligibility Map for Mebane – the entire area CURRENTLY qualifies for USDA Home Loan financing, no money down, really low PMI. When Congress makes the change, most of the “city” of Mebane will no longer be eligible for the USDA Home Loan NC program.
Again, USDA Home Loans have no down payment requirements. The monthly USDA PMI rate is only .5%, and does not go up if you have lower credit scores. There are two credit score thresholds for a USDA Home Loan NC approval. The Automated Underwriting system (GUS) is good at approving borrowers who have a credit score of 640 or higher.
For buyers with credit scores in the 620 – 639 range, GUS will not issue an approval, and those loans require Manual Underwriting.
That basically means that an Underwriter must have strong compensating factors, such as a lower debt ratio, in order to “justify” approving your loan outside of the GUS system. All USDA Home Loans (no matter what the credit score) must go to the USDA Office for approval.
If you have not owned a home in the last 3 years – then you might qualify for the NC First Time Home Buyer Grant Program through NCHFA. This program offers a 3% Grant that can be used for down payment or closing costs. The minimum credit score required for the Tax Credit or the Grant program is 640. This means that 2 or your three credit scores need to be at or above 640 to qualify for the program.
Have questions about the USDA Loan Eligibility Map for Burlington NC, USDA Home loans in Mebane NC, or qualifying for one of the no money down home loan programs – please call Steve and Eleanor Thorne, NC Mortgage Experts 919 649 5058. We love helping folks buy their dream home!