At Dash Home Loans, we make the mortgage financing process quick, painless, and (dare we say?) enjoyable. If you’re looking for a no-money-down loan option with a competitive APR, our expert Mortgage Coaches can determine your Florida USDA1 loan eligibility.
The USDA loan program offers many benefits for potential homebuyers in rural and suburban areas of Florida. USDA loans require no down payment and have flexible credit requirements. If you’re interested in buying a home with zero down in Florida, follow this guide to learn how to apply for a USDA loan.
Overview of USDA Loans
The USDA’s Single Family Housing Direct Home Loan program, also called the Section 502 program, helps low-to-moderate income buyers purchase homes in eligible rural areas. Some key facts:
- Requires no down payment
- Offers fixed interest rates, currently around 4.75%
- Does not require private mortgage insurance
- Allows flexible credit score requirements – can be as low as 580
- Direct loans from the USDA, not banks
- No maximum income limits, but must be below moderate-income level for area
USDA loans offer significant savings compared to conventional loans or FHA loans. We’ll cover the step-by-step process to apply next.
Determine Your Eligibility
Before applying, make sure you meet the USDA direct loan eligibility rules
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Location: The home must be in a USDA-designated rural or suburban area. Use the USDA Eligibility Site to check.
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Income Your income must be below the moderate-income level for your county. Check limits here.
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Credit history: Minimum 580 FICO score required. USDA reviews all credit factors, not just the score.
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Debt-to-income ratio: Your total debt payments should not exceed 41% of gross monthly income.
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Citizenship: At least one borrower must be a U.S. citizen, U.S. non‐citizen national, or Qualified Alien.
If you meet these requirements, you can proceed with the application process.
Gather Required Documents
Putting together a complete application package for your USDA loan ensures faster processing. Collect these documents ahead of time:
- Your last 2 years of tax returns
- W-2s and recent pay stubs
- Bank statements
- Debt information like credit card statements
- Retirement account balances
- ID documents like driver’s license
- Proof of citizenship or permanent residency
- Divorce decree or separation agreement, if applicable
- Child support court order, if applicable
- Gift letter, if using gift funds
Having all documents ready streamlines approval.
Choose a USDA Lender
USDA does not directly make loans. You must apply through an approved USDA lender. This is a mortgage lender that participates in the USDA program. Look for lenders familiar with USDA loans in Florida.
Ask potential lenders:
- Are you a USDA-approved lender?
- How many USDA loans have you closed in Florida?
- What are your rates and fees for USDA loans?
Narrow down your choice and select a lender to handle your application.
Complete the USDA Loan Application
Your lender will have you fill out a full mortgage application package. Standard 1003 forms plus:
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USDA Income Questionnaire: Documents all household income sources.
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USDA Assets Questionnaire: Lists checking, savings, retirement accounts, and other assets.
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USDA Credit History Worksheet: Covers your debts, credit scores, payment history, judgments, collections, etc.
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Gift Letter: If receiving a gift for your down payment or closing costs.
Submit all required documents from step 2 with the completed application. This is the full package that allows USDA to verify your eligibility.
Get Pre-Approved
The lender will review your application and submitted documents to ensure you meet the eligibility criteria we discussed earlier.
If approved, you’ll get a pre-approval letter stating the maximum loan amount you qualify for. This allows you to confidently start making offers on homes for sale knowing your financing is secured.
Find a Home and Make an Offer
Start searching for homes in your target price range within USDA-eligible areas. FOCUS ON THESE KEY POINTS:
- Stick to the maximum purchase price allowed by USDA loans in your county.
- Property must meet USDA habitability standards and lender appraisal requirements.
- Condos and townhomes usually allowed if USDA-approved.
- No fixer-uppers allowed – must be move-in ready.
Once you find the perfect home, your agent will submit an offer and negotiate on your behalf. Get inspections done during this time.
Final Underwriting and Closing
After accepting an offer, your lender will complete full underwriting to verify all figures on your loan application. The home will get appraised to ensure its value matches the sale price.
Once approved, you’ll sign final closing documents to seal the deal! After a closing period, you’ll get the keys and officially move into your new USDA-financed home.
From pre-approval to closing typically takes 45-60 days for USDA loans. Your lender will guide you through every step.
Tips for a Smooth USDA Loan Process
Follow these tips for the best experience applying for and getting a USDA home loan in Florida:
- Check your eligibility thoroughly before applying.
- Work with an experienced USDA lender familiar with Florida’s market.
- Organize all your documents and financial records upfront.
- Stick to USDA requirements when shopping for homes.
- Get pre-approved before seriously looking for a home.
- Respond quickly to lender requests for more information.
- Seek guidance from your lender, real estate agent, and closing attorney.
The USDA mortgage program opens the door to homeownership for low-to-moderate income buyers across rural Florida. Following this step-by-step guide will help you successfully navigate the application process and start your path to owning your own home.
Florida USDA Loan Requirements
USDA loan requirements are fairly consistent across the country. To qualify for a USDA loan in Florida, you must meet the following criteria:
- Income Limits: You cannot make more than 115% of your area’s median income.
- United States Citizenship: Only permanent residents can apply for a USDA loan.
- Mortgage Insurance: USDA loans require mortgage insurance.
- Primary Residence in a Rural Area: The home must be located in an area with less than 20,000 people. It must also be your primary residence, not a vacation home or investment property in Florida.
If you meet these requirements, a USDA loan could be the right home financing tool for you. But if you make a little too much cash or are hoping to flip a fixer-upper, explore Dash’s other lending options. You’re sure to find something that suits your needs.
Florida USDA Loan Eligibility
A zero-down2 mortgage sounds pretty sweet, right? But there’s a catch: Not all homebuyers qualify.
To secure a Florida USDA loan, you must be purchasing a home in a rural locale. The U.S. Department of Agriculture defines “rural” as any place with a population of less than 20,000.
Not sure if your charming coastal town fits the bill? Check out eligibility maps through the USDA.
Fortunately, about 80 percent of the Sunshine State is eligible for USDA financing. For instance, if you’re house-hunting in the quaint waterfront towns of Mount Dora, Saint Augustine, or Naples, you’re in the clear. However, if you’re house-hunting in or around bustling cities like Orlando, Miami, and Tampa, you won’t have much luck finding a USDA-eligible property.
The U.S. Department of Agriculture also requires that homeowners meet specific income requirements. In Florida, you cannot make over 15% more than the median salary where you live. In Naples, this shakes out to be $96,950 for a four-person household and $127,950 for a five- to eight-person household. In more affluent towns like Boca Raton, the limits increase to $101,000 and $133,300, respectively.
Florida USDA loan eligibility is affected by creditworthiness as well. To qualify for a Florida USDA loan, you must have a FICO score of at least 640 and a debt-to-income ratio of 41% or less. You’ll also need to show two years of employment history and at least six months at your current job.
Not sure if you’ll make the cut? Contact us today to be connected with an expert Mortgage Coach. These five-star teammates will answer all your home financing questions and provide reassurance when you need it most. And, if a USDA loan isn’t a good fit, they’ll walk you through more than a dozen other loan types.
5 Things You Need to Know About USDA loans
FAQ
What do you need to qualify for a USDA loan in Florida?
Is FHA better than USDA?
What cities in Florida are USDA approved?
How long does USDA pre-approval take?
How do I get a USDA loan in Florida?
USDA loan requirements are fairly consistent across the country. To qualify for a USDA loan in Florida, you must meet the following criteria: Income Limits: You cannot make more than 115% of your area’s median income. United States Citizenship: Only permanent residents can apply for a USDA loan.
What is a USDA loan?
A USDA loan is a zero-down lending option backed by the U.S. Department of Agriculture. USDA loans make homeownership possible for low- to moderate-income families living in or moving to rural pockets of America. Issued as part of the USDA Rural Development Guaranteed Housing Loan program, USDA loans are a great option for cash-strapped homebuyers.
How do I apply for a USDA loan?
Whether you’re a seasoned real estate guru or novice homebuyer, Dash makes applying for a USDA loan quick and easy. We do mortgage lending differently and are always there for you, no matter what. If you’re ready to get started, apply through Dash’s online system. You’ll then be matched with a Mortgage Coach who will offer step-by-step guidance.
Does dash offer USDA home loans in Florida?
If so, keep in mind that only USDA approved mortgage lenders can offer USDA home loans. As a USDA approved mortgage lender in Florida, Dash can help you get prequalified and start house-hunting in a jiffy. Just how fast?