USDA Home Loans in Virginia
Applying for a USDA home loan doesn’t have to be difficult – Dash is here to help you find the most affordable Virginia home loans for your needs.Apply for a USDA loan
- What Is a USDA Loan?
- USDA Loan Eligibility in Virginia
- Benefits & Disadvantages USDA Loans
- USDA Loans vs FHA Loans
- USDA Loan Requirements for Virginia Borrowers
- How to Apply for a USDA Loan in Virginia
What Is a USDA Loan?
A USDA home loan is a residential mortgage backed by the U.S. Department of Agriculture. USDA loans are designed to support low- to moderate-income home buyers while boosting development in rural areas.
Launched by the USDA in 1991, the Single Family Housing Guaranteed Loan program sought to expand the availability of home loans for people looking to live outside city limits. The program has since gained ground and emerged as a popular financing option for qualifying borrowers.
USDA loans can be a great option for home buyers with limited cash. That’s because unlike conventional loans in Virginia, which generally require a down payment of 20%, USDA loans require no money down². Of course, buyers are still expected to pay closing costs as well as annual and upfront guarantee fees. Guarantee fees help loan issuers pay for administrative costs and reduce the risk of loss if you default.
USDA Loan Eligibility in Virginia
We know what you’re thinking: “0% down? Sign me up!” But not every home buyer is eligible for a USDA loan in Virginia. To qualify for a USDA loan, you must be purchasing a home in a rural area. To determine if your dream home fits the bill, we suggest using the USDA eligibility map.
The USDA eligibility map will help you find areas in Virginia with a population under 20,000, meaning they meet the U.S. Department of Agriculture’s definition of “rural.” You can check out eligibility maps through the USDA – or you can make it easy on yourself and talk to one of our Mortgage Coaches for eligibility questions.Apply now
USDA Loans in Virginia: Eligibility Areas
There are plenty of quaint mountain towns and charming coastal villages in Virginia to call home. Many of these areas are considered rural by the U.S. Department of Agriculture. If you’ve found a house in Farmville or Damascus, for instance, you’re golden. But you’re probably ineligible for a USDA loan if you’re hunting in or around major cities like Virginia Beach, Chesapeake, Norfolk, Arlington, and Richmond.
USDA Loan Eligibility Requirements in Virginia
To get a USDA loan, you must meet certain income requirements. In Virginia, you cannot make over 15% more than your area’s median income. The exact dollar amount varies by county, though it’s typically about $114,450 per year for a family of four and $151,050 for families of five or more. Your USDA loan application will require income documentation.
The USDA rural housing loan also specifies other financial requirements. As far as credit, you must have at least a 640 FICO®* score and a debt-to-income ratio of 41% or less. You must also be able to show consistent employment and an ability to accumulate savings.
Still not sure if you qualify? Contact the home lending experts at Dash Home Loans. Our Mortgage Coaches are like financial shamans, guiding home buyers through the mortgage lending process. If your Mortgage Coach determines that a USDA loan isn’t a good fit, we offer more than a dozen other types of home mortgage loans in Virginia.Apply now
Benefits & Disadvantages of USDA Loans
USDA loans make sense for low- to moderate-income individuals who want to live in a rural area. Since no down payment² is required, families don’t have to worry about limited cash reserves. Plus, USDA loan rates are often lower than conventional loan rates.
The most obvious drawback to USDA financing is the geographical restriction. Unless you’re exclusively looking outside city limits, you may fall in love with a home that doesn’t meet the USDA’s location specifications. The income specifications also might not work for all families.
USDA or FHA Loan? Which Is Better?
USDA loans and FHA loans in Virginia are commonly compared because they’re both government-backed mortgages⁶. While USDA loans are guaranteed by the U.S. Department of Agriculture, FHA loans are guaranteed by the Federal Housing Administration. That doesn’t mean the government is literally issuing you cash, it just means that the respective agency protects the mortgage lender if you default on your loan.
But what else is different about these two financing options? Well, for starters, USDA loans require no money down². This allows low- to moderate-income families to purchase a house with limited liquid assets. Comparatively, FHA loans require 3.5% down for applicants with a FICO®* score of 580 and higher. If you have less-than-perfect credit, you may be required to fork out 10% of your total loan amount.
Of course, USDA loans are more limiting in some respects. To qualify for a USDA loan, you must be purchasing a home in a specific geographical area. You must also meet income specifications. There are no location or income restrictions with an FHA loan.
USDA Loan Requirements for Virginia Borrowers
USDA loan requirements are fairly uniform across the country. To qualify for a USDA loan in Virginia, you must meet the following:
- Income Limits: You must provide proof of stable employment, but you cannot make over 15% more than 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 a rural area and it must be your primary residence, not a vacation home or income property.
If your family meets these requirements, a USDA loan could be a viable option. After all, this financial instrument requires no money down² and typically offers better interest rates than conventional loans.
How to Apply for a USDA Loan in Virginia
Applying for a USDA loan is much like applying for any other home loan. You’ll begin by meeting with your mortgage lender, who will provide all the necessary documents. But at Dash, we do more than drown you in paperwork. We walk you through the loan application process, step-by-step.
Ready to get started? First, apply through Dash’s online system. You’ll then be matched with a Mortgage Coach who will help you gain pre-approval⁷.
Applying for a loan takes just minutes. From there, lenders need to start processing information. Depending on the lender, this can take from 30 days to three months to complete.
Documents & Paperwork to Submit
Documentation for a USDA home loan includes several items, including:
- Proof of Income: This includes pay stubs, two years of federal tax returns, W-2 statements, and other documentation proving income.
- Asset Verification: In addition to this, lenders need to see proof of assets you own, such as investment accounts and bank statements to prove down payments and cash reserves.
- Employment Verification: Many lenders want to ensure you are working. Paycheck stubs usually suffice, but self-employed workers need to provide additional documentation, such as bank statements, to prove income.
- Identification: You will need to show proof of your identity, such as your driver’s license or State ID. You will need to show proof of your Social Security number as well.
All of this information is verified as accurate to ensure only those who should apply can do so.
At Dash, we understand that applying for a USDA loan in Virginia can be a huge headache. That’s why we cut out the middle man (i.e., mortgage processors) and streamlined the entire process. We’re like the Quicksilver of the financial world. We move quickly, anticipating potential snags and additional requirements so that you can enjoy your dream home sooner.Apply now
USDA Mortgage Lenders in Virginia
Are you looking to get pre-qualified for a USDA loan? Keep in mind that only USDA-approved mortgage lenders can offer USDA home loans. As a USDA-approved mortgage lender, Dash Home Loans provides Virginia residents with a quick and painless home lending process.
Frequently Asked Questions
Virginia USDA Home Loan FAQs
What is a USDA home loan?
A USDA home loan is a residential loan guaranteed by the U.S. Department of Agriculture⁶. These loans are designed to help low- to moderate-income individuals secure financing for properties located in rural areas.
What are USDA loan closing costs?
Closing costs vary depending on the lender. Typically, however, USDA loan closing costs are three to 5% of the purchase price.
How much will a USDA loan approve me for?
Your USDA home loan limit is based on your financial circumstances. Individuals with a higher income and credit score will generally be approved for a larger loan.
What is a USDA eligible area?
A USDA eligible area must meet the U.S. Department of Agriculture’s definition of “rural.” Typically, rural areas have a population that is less than 20,000. You can check out eligibility maps through the USDA.
What is the income limit for USDA home loans?
To qualify for a USDA home loan in Virginia, you cannot make over 15% more than your area’s median income.
*FICO® is a registered trademark of Fair Isaac Corporation.
This ad is not from HUD or FHA and was not approved by HUD or any government agency.
¹ Dash Loan Closing Guarantee Disclaimer: Guarantee is based on loan closing; restrictions apply.
² No-Down-Payment Disclaimer: Closing costs and fees may still apply.
³ Lending Disclaimer: Mortgage rates are subject to change and are subject to borrower(s) qualification. APR rate(s) quoted is/are based upon a (loan amount), (loan term, including whether fixed or ARM) year.
⁴ Refinancing Disclaimer: When it comes to refinancing your home loan, you can generally reduce your monthly payment amount. However, your total finance charges may be greater over the life of your loan. Your PRMI loan professional will provide you with a comprehensive refinance comparison analysis to determine your total life loan savings.
⁵ VA Home Loan Disclaimer: VA home loan purchases have options for 0% down payment, no private mortgage insurance requirements, and competitive interest rates with specific qualification requirements. VA interest rate reduction loans (IRRRL) are only for veterans who currently have a VA loan – current loan rate restrictions apply, and limits to recoupment of costs and fees apply. VA cash-out refinances are available for veterans with or without current VA loans. Policies and guidelines may vary and are subject to the individual borrower(s) qualification. Program and lender overlays apply.
⁶ Down Payment Assistance Disclaimer: First lien interest rates may be higher when using a DPA second.
⁷ Pre-Approval Disclaimer: Pre-approvals are given to clients who have met qualifying approval criteria and specific loan requirements at the time of applications. Results may vary.
General Disclaimer: The content on this page has not been approved, reviewed, sponsored, or endorsed by any department or government agency.
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Virginia-Bureau of Financial Institutions: MC-2248, Broker MC-2248, NMLS #3094
For refinance advertisements that state a reduction on monthly payment, please note: the total finance charges may be higher over the life of the loan.