I'm On SSI Disability - And I Was Told That My Income Is Too Low for a USDA Direct Home Loan

[Anonymous]

I have been doing a lot of reading about the USDA direct home loan program. I have read a lot about maximum income limits - but nowhere have I read anything about minimum income limits to qualify for this loan program. I'm on SSI disability so my monthly income is $735/mo.

Today I was in touch with my USDA area field office (the N. Fort Myers, FL sub-branch) to request an application for their direct loan program. Apparently the gentleman I spoke to was doing some "pre-qualification" with me on the phone - and he just flat out said my income is too low to be considered for the program.

I have read that this program is supposed to be available to "very low income individuals" and that such loans contain "subsidies". So if this is the case how can my income be too low?

I live in Sarasota County, FL and there lots of moderate houses here in the $100,000 to $150,000 range. The maximum USDA direct loan for Sarasota County is $230,000. I read that "very low income" individuals generally pay 22% of their income towards the mortgage. It seems to me I could easily pay approximately $150/mo and get approximately $500/mo to $750/mo subsidized to qualify for a "modest house"? So I was just wondering if the guy I spoke to from the USDA field office was giving me accurate information by telling me my income is too low to qualify? Given the goals of the program isn't this almost a form of discrimination? Should I try calling back and ask to speak to somebody else? At the moment I'm a bit confused about this.

[DallasLoanGuy]

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@Anonymous wrote:

I have been doing a lot of reading about the USDA direct home loan program. I have read a lot about maximum income limits - but nowhere have I read anything about minimum income limits to qualify for this loan program. I'm on SSI disability so my monthly income is $735/mo.

Today I was in touch with my USDA area field office (the N. Fort Myers, FL sub-branch) to request an application for their direct loan program. Apparently the gentleman I spoke to was doing some "pre-qualification" with me on the phone - and he just flat out said my income is too low to be considered for the program.

I have read that this program is supposed to be available to "very low income individuals" and that such loans contain "subsidies". So if this is the case how can my income be too low?

I live in Sarasota County, FL and there lots of moderate houses here in the $100,000 to $150,000 range. The maximum USDA direct loan for Sarasota County is $230,000. I read that "very low income" individuals generally pay 22% of their income towards the mortgage. It seems to me I could easily pay approximately $150/mo and get approximately $500/mo to $750/mo subsidized (what does that mean?)to qualify for a "modest house"? So I was just wondering if the guy I spoke to from the USDA field office was giving me accurate information by telling me my income is too low to qualify? Given the goals of the program isn't this almost a form of discrimination? Should I try calling back and ask to speak to somebody else? At the moment I'm a bit confused about this.

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i think the person you talked to is saying that $735/mo income isnt enough income to buy a $150K house

[Anonymous]

Roughly speaking if I were to be financed for a $150,000 house with a 30 year mortgage at around 3.2% - my monthly mortgage payment would be in the ballpark of $650/mo. So assuming I pay 22% of my income towards the mortgage-  that would come out to $162/mo, meaning $650/mo - $162/mo = $488/mo of the mortgage would be subsidized by the USDA. Is that really an exorbitant amount? It doesn't seem like it to me. For instance the HUD Section 8 program generally pays more than $488/mo to subsidize low income rentals for tenants in that program. If I were to contribute $162/mo of my income to a mortgage - that would still leave me $573/mo for other expenses - plus I would qualify for food stamps. It's doable for a frugal person.

[Anonymous]

Florida | Virgin Islands
Joseph M. Mueller, Acting State Director
4440 NW 25th Place
Gainesville, FL 32606
Voice: (352) 338-3400
Fax: (352) 338-3405

www.rd.usda.gov/fl


https://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do?pageAction=stated

[DallasLoanGuy]

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@Anonymous wrote:

Roughly speaking if I were to be financed for a $150,000 house with a 30 year mortgage at around 3.2% - my monthly mortgage payment would be in the ballpark of $650/mo. So assuming I pay 22% of my income towards the mortgage-  that would come out to $162/mo, meaning $650/mo - $162/mo = $488/mo of the mortgage would be subsidized by the USDA. Is that really an exorbitant amount? It doesn't seem like it to me. For instance the HUD Section 8 program generally pays more than $488/mo to subsidize low income rentals for tenants in that program. If I were to contribute $162/mo of my income to a mortgage - that would still leave me $573/mo for other expenses - plus I would qualify for food stamps. It's doable for a frugal person.

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i didnt know they did subsidies..... sorry i cant help

[Anonymous]

I filled in everything from your USDA eligibility link - and it says I'm eligible for the direct loan. 

[DallasLoanGuy]

maybe you can call back and get a better reason.... or better answer.

and someone else might have some info on how the subsidy works.  i didnt know they would pay 75% of your mortgage payment. if you were low income. 

[StartingOver10]

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@Anonymous wrote:

Roughly speaking if I were to be financed for a $150,000 house with a 30 year mortgage at around 3.2% - my monthly mortgage payment would be in the ballpark of $650/mo. So assuming I pay 22% of my income towards the mortgage-  that would come out to $162/mo, meaning $650/mo - $162/mo = $488/mo of the mortgage would be subsidized by the USDA. Is that really an exorbitant amount? It doesn't seem like it to me. For instance the HUD Section 8 program generally pays more than $488/mo to subsidize low income rentals for tenants in that program. If I were to contribute $162/mo of my income to a mortgage - that would still leave me $573/mo for other expenses - plus I would qualify for food stamps. It's doable for a frugal person.

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Agree with DallasLoanGuy, speak directly to the LO you spoke to for more details.

I have never heard of an ongoing contribution toward a mortgage payment either from any program. I have heard of downpayment assistance which is a one-time contribution received at closing. It would be best to get confirmation from someone in the program that you would receive a monthly contribution for the life of the loan. 

One of the things that concern me about your post is that it looks like your calculations haven't taken the real estate tax payments and homeowners insurance into account. HOI is very expensive here in FL. 

[Anonymous]

USDA does have ongoing subsidies and a 38 year repayment plan for very low income. Please contact the state director directly as loan officers do not process USDA direct loans and to actually get the process for direct started you will have pay the 25.00 application fee along with filling out the application packet completely. This is the proper way to begin your process for USDA direct.

USDA guarantee is a little different and does go thorough affiliated mortgage companies.

[Anonymous]

https://www.rd.usda.gov/programs-services/single-family-housing-direct-home-loans

Additional Direct loan program information.