First National’s experienced mortgage lenders are ready to help you determine if you qualify for a USDA Guaranteed Loan, but you might start by determining if the property is in an eligible area and if you fit the income limits. In addition, here are some of the most commonly asked questions:
What is a Guaranteed Loan?
The USDA provides Single-Family Housing Programs to provide homeownership opportunities to low- and moderate-income individuals and families living in eligible areas.
Does the home we’re interested in qualify?
Here is a brief overview: The home must be modest in size and located in an eligible rural area of 20,000 people or fewer. Examples of local eligible areas are Northfield, Faribault and Lonsdale. Due to recent census data, changes may occur effective October 2014. Guaranteed loans are intended for moderate-income homebuyers and are administered through traditional lending institutions like First National.
Credit – is there a minimum score?
The USDA will guaranty loans with minimal credit and no credit.
How much money do we need to bring to the closing?
A USDA loan can be structured with your real estate agent where NO MONEY is brought to the closing table.
What is the guaranty fee?
The guaranty fee that is built into the loan is essentially the government loans version of PMI or Private Mortgage Insurance. It is built upon 2% of the loan amount and it amortizes down through the life of the loan.
How do I apply?
You must start by completing an application with First National’s mortgage lending team. A free pre-approval is encouraged to see if your income and the property qualifies prior to writing a purchase agreement.