We talk to a ton of people who really just want a home in the country… and in North Carolina, they are in luck, because we go from “City” to “Country” in about 15 minutes in most parts of our state! The BEST Mortgage program for a house in the country in NC, is the USDA Home Loan program. The NC USDA Eligible Area Map is expected to have some changes in 2014.
NC USDA Eligible Area Map Changes
Right about the time the Government shut down, the USDA Eligible Area Maps were scheduled to change in NC. Now that Congress “kicked the can” on a decision about the US Budget – the NC USDA Eligible Area Map change date was moved to September 30, 2014.
What Does a Change in the USDA Eligible Area Maps in NC Mean?
USDA Home Loans are no down payment mortgage loans that have super low PMI terms. The USDA Home Loan is the cheapest way to buy a home in the Country, for those who are not Veterans.
To qualify for a USDA Home Loan in North Carolina you need to be under the Income Limits for the County you want to buy a house in, you need at least 2 credit scores over 620, and you must buy a house that is within the USDA Eligible Area Map. Congress included language in the Farm Bill (which is part of the Budget) that would change the current USDA Maps in NC. When that change goes through, roughly one-third of North Carolina will no longer be eligible for the USDA Home Loan Program, and areas around Raleigh, Greensboro, Charlotte and Wilmington will see significant areas that lose the USDA Home Loan Program.
The USDA Loan program was designed to spur development in more rural parts of our Country, and the way Congress originally set up what “country” or “rural” means was to go off of the Census Tract numbers that are published every 10 years. A Rural Housing commission advised Congress that being too “aggressive” in defining this area, could result in more than 1.3 of North Carolina loosing eligible areas for the program.
USDA Eligible Area Maps were scheduled to change with the Budget in the fall of 2012, then that date was pushed to January 2013, and then to . With the Continuing Resolution by Congress on the Budget – the next date for the USDA Loan Eligibility maps to change will be September 30, 2014.
Steve and I disagree. I think it will be delayed until sometime in the Summer of 2015 – Steve thinks they will change the maps much sooner. My rationale is based upon the fact that in the US Farm Bill (which is the deciding factor about when and how the USDA Maps Change) the Senate pushes the change to 2015 and the House pushes it much further out.
Steve feels like this new definition of Rural (which is what is causing the USDA Home Loan Map Changes) could be a revenue positive for the US Budget. He feels that because the “new definition of Rural” affects so much more than just Home Loans, it could save the US big bucks. Because this is a Budget discussion in Congress, any revenue positive decisions could be a good negotiating point. So Steve thinks in the negotiation process, the maps could be changed as the Farm Bill gets approved. So – who knows. One of us is right.
Requirements for a USDA Home Loan North Carolina
The requirements for a USDA Home Loan in North Carolina are pretty simple.
- Owner Occupied Property – this is not for investment or rental property.
- The Land can not be worth more than the actual home.
- Outbuildings must meet code, and the value of this must be seen as minimal. This is not a great loan for a Commercial Working Farm or Equestrian Center.
- Middle credit scores should be between 620 and 640 depending on what program you are applying for, like MCC (which is for First Time Home Buyers).
- The Household income must be below the maximum income limit set for the county you buy a home in.
- You do NOT need to be married to count another person’s income to qualify for a home.
- Child Care payments can be deducted from Gross Income to qualify
- Student Loans must be current, and we must have documentation on the payment amounts, even for deferred student loans.
- Seller can pay all or part of the Closing Costs as long as the Appraisal supports it.
- You can not use the USDA Home Loan program for an existing manufactured / mobile home.
- You can not own another property within a reasonable commute to your office. So if you want to buy a house in Greensboro using a USDA Home Loan, and you already own a home in Elon – it will depend on where you work, as to whether or not you can buy a house in Greensboro using the USDA Home Loan program. You will need to qualify using both house payments, unless you’ve been renting the home in Elon for at least 12 months, and we can see that on your tax returns.
- The maximum debt to income ratio is 43.00% – although we’ve seen some go a little higher with good offsetting factors.
If you have questions about NC USDA Eligible Area Map, or requirements for USDA Home Loans in North Carolina, please call Steve and Eleanor Thorne 919 649 5058 – we do many no money down loans, and offer today’s best rate! Connect with us on Facebook or G+ for updates!