Frequently Asked Questions

Can anyone get a USDA loan?

Yes.  Anyone is eligible, but there are income limitations based on the number of people in your family and the median income for your area.   Click here check income for income limits in your local area.  The “Mod.Inc-Guar.loan” limts are the ones that apply to most families.  If you are in the “low income” category, you need to contact the USDA directly on the USDA Direct program.  Please contact us for specific questions regarding income calculations.

What are the main benefits of the program?

Zero down payment.

No loan limits or sales price limits.

No cash reserve requirements.

Closing costs can be financed if your appraisal comes in higher than your sales price.

There is a 2% loan guarantee fee which is financed into the loan.  There is a low monthly guaranty fee which is much lower than the comparable mortgage insurance on FHA loans.

The seller can pay your closing costs.

You don’t have to be a first time home buyer.

What are the restrictions on the program?

While you don’t have to be a first time home buyer, there are restrictions if you own other property.  The property cannot be within commuting distance of the house you are purchasing and there may be limitations on using the rental income from the property.

No other living units or income producing structures are allowed on the property including corrals, barns, mother-in-law quarters, or large storage structures.

Income producing property is not allowed.

If there is an in ground swimming pool, the appraiser cannot give the pool any value in the appraisal.

If the property is in a flood zone, besides flood insurance an “elevation certification” is required to show that the home is built above the flood plane.

There may be other restrictions based on specific property or borrower situations.

Baxter Scruggs is a mortgage banker offering in USDA loans in California, NMLS #156370. He can be reached at bscruggs@guildmortgage.net, or at 760-497-7705, or toll-free at 877-347-0004, ext. 226. Licensed by the California Department of Business Oversight under the California Residential Mortgage Lending Act.  The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Terms and conditions apply, all loans subject to underwriter approval. Subject to change without notice. Guild Mortgage Company NMLS #3274


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