USDA Loans – paving a path to homeownership

USDA Guaranteed Loans are mortgages offered by lenders. The U.S. Department of Agriculture guarantees these mortgages to encourage homeownership in less densely populated areas of the country. The USDA acts as the guarantor for the mortgage, and a lender issues you the loan.

FEATURES OF USDA LOANS

100% financing available

Low monthly mortgage insurance with a 1.00% Guaranty Fee that can be rolled into the loan

Generous income guidelines

Low interest rates

Lender credits available to offset closing costs

PROPERTY ELIGIBILITY

The property you’re purchasing must fall within approved “rural” areas to qualify for a USDA loan. Despite the program’s reputation for serving primarily rural areas, 97% of the US landmass is eligible for USDA financing. Eligible areas in Hawaii include: On Oahu Waikele, pockets of Royal Kunia and Village Park, Ewa Beach up to Makaha, Waipio Acres, Whitmore Village, North Shore down to Haiku Road in Kaneohe, and the Town of Waimanalo. Neighbor Islands – all islands are USDA eligible except for Hilo on the Big Island.

MINIMUM QUALIFICATIONS

Ability to prove credit worthiness, minimum credit score of 580

Stable and dependable employment for the last 2 years

A willingness to repay the mortgage – generally 12 months of no late payments or collections

Household members must be at or below income guidelines

The property serves as the primary residence and is in a qualified rural area.

CREDIT REQUIREMENTS

Applicants must show stable income and a credit history that demonstrates the ability and willingness to repay the loan. There is no minimum credit requirement for the USDA loan. However, applicants with a credit score of 680 or higher are eligible for the USDA’s automated underwriting system. Applicants below the 680 mark may still be eligible but may be subject to manual underwriting, which can mean more stringent guidelines.

MORTGAGE INSURANCE

Mortgage insurance for USDA loans is less expensive than it is for competing loan products, like conventional or FHA mortgages. The USDA requires a Guaranty Fee of 1.00% of the loan amount, and a monthly mortgage insurance fee of 0.35% of the loan balance.

To learn more register to attend our FREE Home Financing Options Seminar on Thursday, January 13th at 6:00 PM. Register now at: www.alignedmortgageseminars.com/hawaii-hfo or call (808) 207-3455.

94-539 Puahi St. Waipahu, HI 96797 NMLS #1696573. A Division of American Pacific Mortgage NMLS #1850. ©2021 American Pacific Mortgage Corporation. For informational purposes only. No guarantee of accuracy is expressed or implied. Programs shown may not include all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions may apply. Equal Housing Opportunity.

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