USDA Loans there's Quite a Loophole here for santa clarita

How The USDA Home Loan Program Works

A USDA Loan is a ZERO down payment home loan.

To ensure the USDA loan process works as intended, the USDA will determine income restrictions depending on the area in which an applicant wishes to purchase a home. STEVENSON RANCH and some parts of ACTON and AGUA DULCE are considered "rural" by the USDA.. This is a giant loophole allowing a few savvy prospective home buyers a chance to purchase a home they might not otherwise be able to qualify for, by supplying the down payment money. It must be re-paid later. Here are some of the rules:

In Los Angeles County, a household of 4 people needs to have an adjusted gross income under $98,800. The applicant will need to submit copies of at least two years of IRS tax filings.

The main requirement in securing a USDA mortgage is to show a clearly visible history of steady income.

Self-employed applicants may need to provide three years of tax returns to establish a clear track record of average income.

Applicants must:

Be without decent, safe and sanitary housing.

Agree to occupy the property as your primary residence and have the legal capacity to incur a loan obligation

Meet citizenship or eligible non-citizen requirements. Not be suspended or debarred from participation in federal programs

Properties financed with direct loan funds must:

Generally be 2,000 square feet or less

Not have market value in excess of the applicable area loan limit.

Not have in-ground swimming pools.

Not be designed for income producing activities.

Borrowers are required to repay all or a portion of the payment subsidy received over the life of the loan when the title to the property transfers or the borrower is no longer living in the dwelling.

Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites.

Regardless of repayment ability, applicants may never borrow more than the Area's Loan Limits

Fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower. Interest rate when modified by payment assistance, can be as low as 1%

Up to 33 year payback period - 38 year payback period for very low income applicants who can’t afford the 33 year loan term

How much down payment is required?

No down payment is typically required. Applicants with assets higher than the asset limits may be required to use a portion of those assets.

Credits:

Photos by Chris Gallatin

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