Are usda loans with it for a first time buyer?

Question

im 22, looking to buy my first home soon as an owner occupied investment property. Anyone have experience using a usda loan for this? Also im only making a couple dollars above minimum per hour here in cali, should i even be thinking about buying?

John Alanis · Answer

Chris Mason So with a usda loan you can't rent out a room or two if you are still living on the property?

Phil G. · Answer

@John Alanis

USDA rural development offers two programs for the purchase of singe family homes in smaller communities.  The guaranteed loan program makes loans through banks and mortgage companies.  The direct program is for folks who might have qualifying for the guaranteed program and loans are made by dealing with USDA directly.

You might check out the non-profit NACA (naca.com).  They offer no money-down/no closing cost loans on 1-4 family properties.  It takes a while to get through their program (think months).  There's some effort involved.  You start by attending a home buyer workshop then some counseling.  I've had a few buyers get financed with them.  Check their website to see if they service your desired geography and more info on the program.

Chris Mason · Answer

You can do what you wish once you have the keys and own the place, but a lender is unlikely to have any way to consider that income when they run their numbers. So you would have to qualify only using your income/credit/assets, not that of any potential tenant(s).

Champak Shah · Answer

Sorry - thanks for clarification -- I was doing Commercial Mortgages - SBA and USDA - before

Chris Mason · Answer

If you're living in a rural area, making just above the (big city-dictated) minimum wage, you might actually fit the profile for who USDA wants to make homeowners out of.

Is it safe to assume that your "couple dollars above minimum wage" that would be hard to live off of in SF or LA, is actually quite a comfortable income where you're living now and where you'd want to purchase?

Chris Mason · Answer

Nah, USDA has residential loans. For federally designated rural areas only, income capped, and generally no house hacking.

http://www.rd.usda.gov/files/fact-sheet/RD-FactShe...

Champak Shah · Answer

USDA - loan is more for business - NOT for home

Are you buying a Duplex - ? live on one side and rent on other side?

Not enough income ? -in California - first check home prices - within 10 miles of where you work.  Also check rent  rate for apartment and home ( duplex ) in your area

Check your credit score - above 650 ..??