USDA Loan Eligibility Map NC

For over 2 years we’ve been reporting that the USDA Loan Maps in NC are subject to change.  The change was part of an effort to re-define the status of “Rural” and when it’s finally implemented – it could affect nearly one third of our state.  The USDA Loan Eligibility Map NC currently scheduled to see a major overhaul in late 2020.  However, we are seeing small changes to the maps about every 6 months.

Areas like Tarboro, Smithfield and Morganton would be considered Urban… and while much of North Carolina has benefited from being in the best Geographic Location (they call us Half-Back Nation) with JOBS – I’ve said it before… we get Rural FAST in NC.  So changing the definition of Rural to the point that Clayton, and Fuquay Varina no longer qualify for USDA Loans in NC, is a big Deal!

The USDA Home Loan Program in NC is a zero down payment required home loan program for those looking for a home in a small town or rural setting. This is the “go to” mortgage program for folks who want to live outside Raleigh in Clayton or Holly Springs Neighborhoods.  We also get lots of calls from folks who want to take advantage of the program in areas around Charlotte, like Belmont.  However, all 100 counties in North Carolina currently have a portion of the County that qualifies for a USDA Loan.

Sellers are allowed to pay closing costs for a USDA Loan in NC, so the borrowers can literally buy their home for PENNIES out of pocket!  No down payment, no closing costs… and, if you qualify, you can also get a forgivable GRANT from the State of North Carolina to cover some of your expenses!

USDA Loan Eligibility Map NC

Some of our competitors reported that the USDA Home Loan Maps for NC were not going to change until 2020… We’ve been waiting for the USDA Eligibility Site to take the notice below down, and they haven’t.  But the fact is, according to the Raleigh Offices of the USDA RD Single Family Housing today – that’s because the maps are STILL changing as they receive updated Census numbers at the end of the fourth and second quarters..

More than 22 Communities in North Carolina that currently have access to the USDA Home Loan Program, will lose the ability offer USDA Loans when the USDA Loan Eligibility Maps make the final changes in 2020. Hundreds of ADDITIONAL neighborhoods will be without the program as well. Areas outside Greensboro, Hickory, Greenville and Holly Springs will be affected… but remember to constantly look, or get us to check, to see if the places you want to live are still eligible – because you could b in the situation we hit this week:

Why do other mortgage folks think that the Maps will NOT change before 2020? Because in the Agricultural Act of 2014 on page 213, it says that the “classification” (current maps) will stay in place until after the census of 2020. The Bill passed both the House and the Senate. So you might think, done deal.

Why are the USDA Loan Underwriters saying that the USDA Eligibility Map NC is STILL subject to change?  Because they are operating under the H.R. 2775.  The the Appropriations Act was amended to reflect the changes approved in the “Farm Bill” ( Agricultural Act of 2014 ), these Farm Bill Changes, require USDA to monitor the Census Tract changes until the next major Census update in 2020.

USDA Loan Requirements

The USDA Loan program really only has 3 requirements.  The Household income has to be below the maximum limit set for the County and must be enough to meet the debt to income guidelines, credit must be current with no late payments in the last 12 months,  and the house must be located within the USDA Loan Eligibility Map “footprint.”  Which is why we are concerned about the USDA Loan Eligibility Map Changes, as it will reduce the areas that qualify for the USDA Loan, no down payment mortgage program.

You must not be over the Maximum Income Household Requirements for your area.  In most parts of North Carolina, USDA Home Loan Requirements are broken down between how many people are in the household.  So, in Wake County, 1 to 4 people in the Household means that the total Household Gross Income can be no more than $92,200.  For a household with 5 member or more, the income limit is $121,700.

This changes per county, so check and see what the limits are for your County.  Also remember that we can make adjustments to the household gross income by following USDA guidelines. The Income adjustments for USDA can be made based specific allowable deductions on tax returns for the past two years, child care expenses, retirement income, disability and several other factors.  If you are just a little over the maximum numbers, call us – we might be able to help you figure it out. 919 649 5058

Frankly, the USDA Loans in NC minimum credit score requirements, are a little tighter for the best rates.  Which is totally understandable, because you are not required to make a down payment.  We can do USDA Home Loan manually underwritten loans with scores of at least 600 – assuming you have very low debt ratios.  Other mortgage programs have different credit score guidelines.

“Clean Credit” is a slang term used OFTEN in mortgage lending.

It refers most often to someone who has 12 months with no late payments.  But it’s not just late payments, it also refers to 12 months with no new collections filed against you.  12 months with no judgments of liens filed on your credit report. In general, you will need a credit score of at least 620.

FINALLY _ we get asked this question very often… “Does that mean a USDA Home Loan is just for a FARM?”  

Oh NO!  This is for your home, not for income producing farms.  The loans do have a guarantee fee of @ 3.5%.  This means that if you purchase a home for $100,000 (I only use this example since I can do this math in my head) then you will have an additional fee of $3500 added to your loan.  The total loan will be $103,500- which means that you will owe more on the home than you paid for it when you close.  Because of this, I think there are a few important things you should consider:

• Are you working with an Agent to get a really good deal on the home?  This is not the time to be an amateur buyer!  It’s time to pull the experts in to purchase a great home!  (If you are not hooked up with a great Realtor in the Triangle, let us know and we’ll refer you!) Since you are going into the property owing more than you paid for it, you want to get a great deal!
• Are you buying a “fixer upper” or a foreclosed property? There are programs designed for purchasing a previously foreclosed property that needs some repairs (Click here for details), but that’s not what USDA is designed for.  This is JMHO, but if the property just needs some updating, that’s one thing… but if the roof needs to be replaced this year, and the carpet is worn thin – I would not want a USDA loan on that home.

Still have questions about the USDA Loan Eligibility Maps? Call us, or leave a message below!  Now is a great time to buy real estate – and there are a TON of options to consider!  919-649-5058 Steve and Eleanor Thorne THE USDA Home Loan Experts in North Carolina!