How The USDA Home Loan Program Works
A USDA Loan is a ZERO down payment home loan.
To ensure the USDA loan process works as intended, the USDA will determine income restrictions depending on the area in which an applicant wishes to purchase a home. Castaic, Fillmore and some parts of ACTON and AGUA DULCE are considered "rural" by the USDA.. This is a giant loophole allowing a few savvy prospective home buyers a chance to purchase a home they might not otherwise be able to qualify for, by supplying the down payment money. It must be re-paid later. Here are some of the rules:
In Los Angeles County, a household of 4 people needs to have an adjusted gross income under $103,500. The applicant will need to submit copies of at least two years of IRS tax filings.
The main requirement in securing a USDA mortgage is to show a clearly visible history of steady income.
Self-employed applicants may need to provide three years of tax returns to establish a clear track record of average income.
How much down payment is required?
No down payment is typically required. Applicants with assets higher than the asset limits may be required to use a portion of those assets.
Credits:
Photos by Chris Gallatin