The Ins and Outs of USDA One Time Close Loans in Georgia

The USDA One Time Close loan program provides an invaluable opportunity for eligible borrowers in Georgia to purchase a home with just one closing. This streamlined process makes attaining homeownership more accessible by reducing costs and complications. In this article, we’ll explore what exactly USDA One Time Close loans are, who qualifies for them, and how the program works in Georgia specifically.

What is a USDA One Time Close Loan?

USDA One Time Close loans, also known as Single Close loans, allow homebuyers to obtain their mortgage financing and purchase their property in just one closing transaction. Traditionally, there are two separate closings when buying a home – the first is to obtain financing and the second is to actually buy the home. By combining these into one streamlined closing, the USDA One Time Close program saves borrowers time, stress, and money.

This offering is made possible through a partnership between the USDA Rural Development program and participating lenders in Georgia. The USDA provides the mortgage funds by guaranteeing qualified loans made by private lenders. They also ensure the program’s affordability and accessibility for eligible borrowers

Key Benefits of One Time Close

There are many advantages to using the One Time Close process when purchasing a home, including:

• Fewer Closing Costs With just one closing, you avoid duplicate fees for title insurance, recording, attorneys, etc, saving $1000+ in many cases

• Shorter Process: You don’t have to go through the hassle of coordinating and completing two separate closings, often weeks apart.

• Less Legwork: The streamlined process reduces paperwork and back-and-forth communications.

• Faster Move-In: You can move into your new home sooner without waiting for a second closing date.

• Easier Coordination: You don’t have to align timing between two lenders and coordinate multiple closings.

• Reduced Stress: One less closing makes the home buying process smoother and less stressful overall.

For eligible borrowers, these benefits make homeownership more feasible and affordable.

USDA One Time Close Loan Eligibility

To qualify for a USDA One Time Close loan in Georgia, borrowers must meet certain eligibility criteria, including:

• Location: The home must be in a designated rural area. The USDA has an eligibility map to check specific locations.

• Citizenship: At least one borrower must be a U.S. citizen, U.S. non-citizen national, or qualified alien.

• Income Limits: Household income must be below set income limits based on family size and location. See USDA income limits for details.

• Credit History: A credit score of 640+ is generally required, along with a good payment history.

• First-Time Homebuyer: The program is limited to first-time homebuyers who will use the home as their primary residence. Exceptions may be made in some cases.

• Homebuyer Education: First-time homebuyers must complete an approved homebuyer education course.

• Debt-to-Income: Your monthly debt payments cannot exceed a certain percentage of your gross monthly income.

As long as these criteria are met, One Time Close can greatly simplify the process of buying an eligible rural home for credit-qualified borrowers.

How the One Time Close Process Works

Here is an overview of how USDA’s One Time Close loans work in Georgia:

• Choose a Lender: Work with a USDA-approved lender familiar with One Time Close loans. They will guide you through the process.

• Get Pre-Approved: The lender will pre-approve you for a loan based on your finances, credit, the property, etc.

• Select a Home: Once pre-approved, you can shop for eligible rural homes within your budget.

• Make an Offer: When you find the right home, make an offer contingent on securing the USDA-guaranteed financing.

• Complete Application: Work with your lender to complete the full mortgage application and submit required documents.

• Secure Financing: The lender will underwrite and approve your One Time Close loan.

• Schedule Closing: You, the sellers, and your lender will coordinate a single closing date.

• Closing Day: At the closing, you’ll finalize loan documents, transfer property ownership, and get the keys!

While the process will vary case-by-case, your lender will guide you through every step.

USDA One Time Close Loan Terms in Georgia

USDA One Time Close loans offer favorable rates and terms to keep homeownership affordable. Here are some of the specifics for Georgia:

• Interest Rates: Current rates are competitive fixed rates set by the USDA monthly. As of July 2022, it is 4.875%.

• Loan Amounts: The maximum loan amount depends on location but cannot exceed the FHA loan limits for the area.

• Down Payment: No down payment is required in most cases. Seller contributions up to 6% are allowed.

• Loan Term: Up to a 38-year term is available for very low-income borrowers only. 33 years for other borrowers.

• Closing Costs: Can be financed into the loan if needed. Seller concessions up to 6% are allowed.

Flexible credit guidelines, low or no down payment, and expanded terms make homebuying attainable for qualified applicants.

How to Apply for a USDA One Time Close Loan in Georgia

If you’re interested in a One Time Close Loan in Georgia, follow these steps:

• Check Eligibility: Use the USDA’s eligibility tools to see if you qualify based on income, location, and other factors.

• Find a Lender: Look for USDA-approved lenders familiar with One Time Close loans in your area.

• Choose a Property: Select a qualified rural property once you are pre-approved.

• Gather Documents: Your lender will provide a list of income, employment, and other documents needed to process your application.

• Complete Application: Work closely with your lender to complete the mortgage application accurately and provide all required documentation.

• Get Homebuyer Education: If you are a first-time buyer, complete a homebuyer education course early in the process.

• Close on Your Home: Once approved, you’ll work with the sellers and lender to close on your new home!

With some preparation and guidance from your lender, the streamlined One Time Close process can make buying a home in rural Georgia much more attainable.

Finding a USDA-Approved Lender in Georgia

Connecting with the right lender is key to successfully obtaining a USDA One Time Close Loan. Here are some tips for finding an approved lender in Georgia:

• Ask friends, realtors, or your real estate attorney for recommendations.

• Search the USDA Lender List for Georgia lenders familiar with the program.

• Look for lenders advertising USDA loans or One Time Close specifically.

• Interview a few lenders and ask about their USDA lending experience and volume.

• Ask if they handle the entire One Time Close process from start to finish.

• Inquire about their application requirements and overall timelines.

• Consider local and regional banks or credit unions rather than national lenders.

Taking the time to find a lender well-versed in the USDA One Time Close program will make your homebuying journey smoother.

The Bottom Line

For eligible borrowers in rural Georgia, USDA One Time Close loans offer a simplified path to homeownership. By combining the financing and purchase into one streamlined closing, buyers save time and money while avoiding an extra burden. This program provides real benefits, but connecting with the right USDA-approved lender is key to navigating the process seamlessly. If you’re looking to buy a Georgia home with affordable USDA financing, the One Time Close option is definitely worth exploring.