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USDA Rural Home Loan Income and Debt Ratio Requirements

Usda Rural Development Loans are available to any buyer who meets the income and credit requirements.

USDA Home Loan - Income and Debt Ratio Requirements

No Maximum Loan Limit - borrowers income and debt ratios become the limit
All income of ALL household members must be verified
Non-occupant co-borrowers or co-signers are NOT ALLOWED
Deferred student loans MUST be counted in debt ratios regardless of length of deferment
Conservative qualifying debt ratios:
- 29%/41%; 29% of Principal, Interest, Taxes and Insurance (PITI) and 41% of Total Debt to Income.
- If proposed home is built to 2000 Energy Code standards, the qualifying debt ratios may reach 31%/43%
Qualifying debt ratios CAN be exceeded with underwriting approval and USDA concucurrence - Must have strong, documented compensating factors

Adjusted annual household income cannot exceed the moderate income limits for the proposed subject property’s area income limits

Check USDA income eligibility here

A $480 adjustment to household income for each child under 18 or "18+ and full-time student"
Family size and child care expense considerations may increase qualification limit if deductions are acceptable
Overtime, bonus, commissions and self-employment income can be used with documented 2-year averaged history
Non-taxed income may be grossed-up by lender with supporting documentation. example: social security benefits

Retained Dwelling/Rental Income - Must meet the requirements of:
- 1) Applicant cannot own a dwelling in the local commuting area
- 2) Own a dwelling which is not structurally sound or functionally adequate. The mortgage payment must be included in Debt Ratio unless evidence supports remaining party has made payment over the last 12 months.
  - Any positive rental income will be added to annual household income and replayment only when determined if income is stable & dependable. Only 1 other property may be retained if eligible.