USDA Home Loan Qualifying and Income Limits

USDA Home Loan Qualifying and Income Limits

The USDA does indeed set income limitations for qualifying for the USDA Rural Home Loan, but a little known fact is that most folks have “adjustments” to their income that will help them to qualify for the USDA Rural Development Home Loan.

The USDA will Review two types of income for qualifying for the USDA Rural Development Home Loan:

  1. Adjusted Household Income
  2. Repayment Income (Gross Earnings)

What do the USDA Rural Development Home Loan guidelines consider as “Adjusted Household Income”? It is basically gross income MINUS any eligible deductions.

Here is a list of 7 eligible deductions for qualifying for a USDA Rural Development Home Loan.

  1. $480 deduction for each child under the age of 18
  2. Verified childcare expenses
  3. $480 deduction for disabled dependents 18 years old or older
  4. $480 deduction for a full time student 18 years old or older
  5. $400 deduction for any eligible elderly family member
  6. A deduction for the care of children 12 years of age or younger, to the extent necessary to allow a member of the family to be gainfully employed
  7. A deduction of the amount of which the aggregate of the following expenses of the household exceeds 3% of the gross annual income: medical expenses for elderly family, Reasonable attendant care, auxiliary apparatus expenditures for dependent family members.

These adjustments to income can help you qualify for the USDA Rural Development Home Loan if your basic income puts you over the limit.

Jamie is a senior loan consultant at AnnieMac Home Mortgage and specializes in USDA and VA mortgage products.  If you have any questions feel free to contact him at 856-505-6718 or email him at jrussen@annie-mac.com.


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