USDA Rural Development home loans are one of the most misunderstood and overlooked mortgage loans. Yet, USDA loans offer qualifying buyers one of the best purchase options available today. By offering a no money down mortgage with unbelievably affordable terms, USDA should always be considered. USDA does have property eligibility requirements as well as maximum household income limits. Although there are USDA income limits, the household income maximums are very liberal. Therefore, many families fall within the income limits and may qualify for a home with 100% financing.
Increased USDA Income Limits 2017 – 2018
The path to homeownership just became easier. Lately, USDA Guaranteed loans have continued to make it easier to buy a home. In 2016, USDA drastically lowered the funding fee and annual fee for borrowers. These reduced costs basically made USDA monthly payments lower. Now for 2017, USDA income limits have increased across the country. The standard income limits for most counties range from $78,200 to $103,200, depending on household sizes. USDA divides household sizes as 1 – 4 members and 5 or more. So with a family size of 1 – 4, the household income limit would be $78,200. Additionally, if the family size is 5+, then the income limit would be $103,200. BUT, there are some counties with much higher USDA income limits. For instance, the Raleigh NC MSA allows for households to make up to $121,700. Check out some areas in NC & SC that have higher USDA household income limits below.
“There are some counties with much higher USDA income limits!”
NC & SC Higher USDA Household Income Limits
|MSA (Metropolitan Statistical Area)||1-4 Household Size Limit||5 or More Household Size Limit|
|Charlotte, Concord, Gastonia||$81,300||$107,300|
|Durham, Chapel Hill||$84,300||$111,300|
|Virginia Beach, Norfolk, Newport News||$84,300||$111,300|
|Hilton Head Island SC||$80,850||$106,700|
|Bluffton, Beaufort SC||$80,850||$106,700|
|Charleston, North Charleston SC||$79,150||$104,500|
Do keep in mind to call us for actual income limits for your area, especially if the home is in an MSA area. We are happy to figure your qualification. Additionally, if a household makes more than the standard USDA income limits, there are ways to exceed these limits! So don’t miss out on ways to use USDA no money down financing. Exceeding the income limits may be possible.
How to Exceed USDA Income Limits
Yes, USDA has household income limits. BUT, families may often exceed these USDA income limits! First of all, keep in mind that USDA income limits go by ALL household income. So it is not just the actual borrowers. For instance, if a parent receiving social security income or retirement income is going to live in the house but not be on the loan, the income must still be included in the household income limit. In addition to liberal income limits, there are several tricks to exceed these limits. Often these limits may be exceeded by right much!
Tricks to Exceed USDA Income Limits!
- Children under 18
- Childcare expenses
- 18 year old full time student
- Disability expenses
- Medical expenses not covered by insurance
The most common way to exceed the household income limit is by adjusting the income by $480 per child under 18. So if there are two children in the household, this adjusts the income limit up by $960. Next, documented daycare expenses may be used to increase the income limit. Therefore, if the borrowers paid $6000 in daycare expense, this goes straight to staying under the limits. Occasionally there may be an 18 year old that is still a verified full time student and this may also use the $480 adjustment. Finally disability or medical expenses may be used to exceed the limits. There are special requirements to use these exceptions. To read more on these exceptions, check out our article, “How to Exceed the USDA Household Income Limits“.
The important thing to remember is that this article is to show you that there are some creative ways to help buyers use USDA to purchase a home. But make sure not to qualify or disqualify yourself! Call our team of USDA experts to see if this is an option for you. We have an efficient USDA process to help buy quickly with one of the best mortgage options available. If USDA is not an option, there are lots of other ways to become a homeowner.
Author: Russell Smith
Team Move OVM Financial loan officer success is Russell’s primary focus. He provides the tools and techniques he used as a top producing loan officer. Additionally he offers the Team Move OVM Financial Agent Training Program. Sharing is so important to Russell so he works diligently to be a resource to loan originators and Realtors.