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Can You Get a USDA Loan in Dallas, TX?

October 21, 2022 | By Shoshana Simones
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Buying a home in Dallas, TX, can be challenging in this hot market. But USDA home loans are a great option for low- and moderate-income borrowers. That’s why our experts are here to answer all of your questions about USDA loans in Dallas, TX.

Who qualifies for USDA financing? What are the income limits? Can you get a USDA loan in Dallas? How do you apply for a USDA loan in Dallas? We will also discuss the benefits of USDA financing and compare it to other home loan options available to low-income borrowers. 

Who Qualifies for USDA Loans?

USDA loans are available to low- and moderate-income borrowers, depending on income and location. Let’s take a closer look:

Income Limits

In order to qualify, you must have a household income that does not exceed 115% of the median income for your area. You can check the income limits for USDA loans in Dallas here.

 

USDA financing is also available to rural homeowners who want to buy a home in Dallas. USDA loan-eligible areas are designated by the government and can be found here.

USDA Financing

USDA financing is available for both new home purchases and refinancing. USDA loans can be used to finance up to 100% of the purchase price of your home. This makes USDA financing a great option for low-income borrowers who may not have the savings for a down payment.

USDA Loan Eligible Area

To qualify for USDA financing, the property you purchase must be located in a USDA loan-eligible area. USDA loan-eligible areas are designated by the government and can be found here.

Where Can You Get USDA Home Loans?

You can get USDA home loans from USDA-approved lenders. https://www.texasunitedmortgage.com/texas-usda-loanhttps://www.texasunitedmortgage.com/texas-usda-loan are banks, credit unions, and mortgage companies that have been approved by the USDA to originate and service USDA loans. Texas United Mortgage has experienced USDA loan officers ready to help. 

Getting a USDA Home Loan in Dallas, TX

The first step in getting a USDA loan in Dallas is to contact a USDA-approved lender. USDA-approved lenders will work with you to get pre-qualified for a USDA loan.

Finding the Right Mortgage Lender in Dallas, TX

When you are ready to apply for a USDA loan in Dallas, it is important to find a USDA-approved lender. USDA-approved lenders are banks, credit unions, and mortgage companies that have been approved by the USDA to originate and service USDA loans.

When choosing a USDA-approved lender, it is important to compare rates and fees. Some USDA-approved lenders may offer lower interest rates or origination fees than others. It is also important to choose a lender with experience originating and servicing USDA loans.

Once you have chosen a USDA-approved lender, you will need to submit a loan application and supporting documentation to the lender. Documentation that is typically required includes:

- two years of tax returns

- pay stubs

- bank statements

- asset documents

Once your loan application is received, the USDA will guarantee the loan. The USDA will then issue a commitment letter to the lender detailing the terms of the loan. Once you are pre-qualified, you will need to submit a loan application and supporting documentation to the lender.

Benefits of a USDA Loan in Texas

USDA home loans offer many benefits to low- and moderate-income borrowers. USDA financing can be used to finance up to 100% of the purchase price of your home. USDA loans also offer competitive interest rates and can be used to finance energy-efficient home improvements.

Another benefit of USDA financing is that there is no minimum credit score required to qualify. This makes USDA financing a great option for borrowers with poor or limited credit history.

USDA loans are also assumable, which means that the loan can be transferred to another borrower if you sell your home. This can be a great way to make your home more affordable for the next buyer.

Lastly, USDA loans are backed by the government, which means that you will not be required to purchase private mortgage insurance (PMI).

Other Home Loan Options for Low-Income Applicants

If you are a low-income applicant, you may also want to consider FHA and conventional loans. FHA loans are available to borrowers with credit scores as low as 580.

FHA Loans

FHA loans are backed by the Federal Housing Administration and are available to borrowers with credit scores as low as 580. FHA loans can be used to finance up to 96.5% of the purchase price of your home.

Conventional Loans

Conventional loans are available to borrowers with credit scores as low as 620. Conventional loans can be used to finance up to 97% of the purchase price of your home.

First-Time Homebuyers Programs

If you are a first-time homebuyer, you may be eligible for special financing programs. These programs can help you with your down payment or closing costs. You can learn more about first-time homebuyer programs here.

Frequently Asked Questions About USDA Home Loans

Here are some common questions about USDA mortgages:

Q: What is special about a USDA loan?

A: USDA loans are available to low- and moderate-income borrowers. USDA loans offer many benefits, including no minimum credit score requirement and the ability to finance up to 100% of the purchase price of your home. USDA loans are also assumable and do not require private mortgage insurance (PMI), nor are there prepayment penalties.

Q: What are the cons of a USDA loan?

A: The main downside of USDA loans is that they are only available in rural areas. In addition, USDA loans have income limits.

Q: Can you pay off a USDA loan early?

A: Yes, you can pay off your USDA loan at any time without penalty.

Takeaways

USDA loans are a great option for low- and moderate-income borrowers. USDA loans offer many benefits, including the ability to finance up to 100% of the purchase price of your home.

USDA loans are also assumable and do not require private mortgage insurance (PMI). If you are a low-income borrower in Dallas, you should consider a USDA loan and find out of you qualify for this home financing.

If you have any questions about USDA home loans, please contact a Texas United Mortgage USDA loan specialist in Dallas today!

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