Lets Talk: USDA Direct 502 Loans

Jami and April discuss USDA Direct 502 Loans — requirements, the process, qualifications and more!

Hi i’m jamie with the homeownership center and i’m your home ownership advisor and today our special guest is april and she’s our loan processor here at the homeownership center so we’re going to talk about the 502 direct loans that she works with the most so april um what are some of the requirements for this loan product well there is certain income guidelines

And there is some um credit score guidelines that we have to go go with um the credit score does need to be at least 640 and the income guidelines depend on each county some of them do vary most of them are right about the 40 000 range dependent is where it starts at depending on how many is in the household okay and so if they have somebody um more than four

People in the household does that change yes it does change it actually goes up from the 40 000 and it depends like i said on which county they’re in as to what the actual guideline would be okay great yeah so i have heard that this product is a zero down payment is that true yes um you can do the zero down payment um that um does get a little bit confusing to

Some because there is still the closing costs that are involved and the closing costs we do ask for the client to have 1500 at least saved in their savings account to provide for their own pest inspection home inspection and appraisal and their first year of homeowners insurance which is required by the loan itself which sounds like it’s that’s pretty normal in

Most products anyways you still have to pay things up front yes okay okay yeah so um this sounds like it’s a kind of a special type of loan um what is the process for this loan and why does it work so well here in our area um this loan does have a special process um it’s a little bit different than your regular conventional and it does take a little bit longer

Depending on each person in their situation this this product itself um does allow for the non-traditional credit which is not something that most people are aware of um the non-traditional credit means that if you don’t have an actual credit score generated or you don’t have enough trade lines on your credit score that you still have the ability to get financing

For a home so and it works really well in our area because our area is very rural and there so far there has not been a house in our service area that we cannot finance that i’ve had come through due to um the area that it’s in as far as eligibility goes on the property okay so with this one product um do you have shop first or do you house shop after you actually

Get approval first which is not just like a pre-qual letter a pre-qualification letter it’s actually you know you’ve already put on in all your documents and you are good to go to shop for a certain amount and that that comes whenever you get your certificate of eligibility um and so whenever you get your certificate that’s when you can go shop and you know the

Amount that you can shop for and your budget as well okay so um some of our other products include home buyer education is that something you have to do with this one as well yes this program does require homebuyer education which we do offer in-house okay all right well thank you so much april i think that really sums up about everything about this product but

If you have any other questions feel free to reach out to us thank you so much

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Let's Talk: USDA Direct 502 Loans By HomeOwnership Center