Does anyone know what the rules for purchasing a second home are for USDA loans?
I have a house i dont want to sell and take a loss on -
I've been working with a broker who is out for a few days , he recommended and pre-approved us for usda loan, but we didnt talk about carrying the old mortgage while purchasing another home. ... now im anxious to find a answer.
we looked at a place we like and its cheap enough that both the new and old mortgage combined with all other bills would still fall at 39% of our income.
so-our income is plenty to cover both loans.
already had credit scores run,
just want to know if anyone knows about if they will approve a loan for a second home, as primary residence while keeping the old loan and renting it out???
ps - we dont need the rental income added to our income to make the ratios work.
Generally you can't own another home when purchasing a home with USDA, there are a few exceptions. Where is the new home located compared to where you live now? Why are you buying the new home?
Just a update incase anyone else has the same question.
I found out yes you can keep a previous home, as long as your income is enough to cover the expenses , and as long as you plan on living in the new home purchased with the USDA loan. .. Which is understandable because they are not funding someone who is just purchasing as a investment.
Of course be careful that you didnt sign anything agreeing to live in the first home for a set amount of time. I did not since it was a conventional loan.
Where did you get that information - as long as your income is enough to cover the expenses? Sounds like a loan officer talk, one who isn't very familiar with USDA's guidelines. The only time you can own another home is if the other home is not in the commuting area, or if it's not structurally sound or functionally adequate. Being able to qualify for both payments is a given.
§1980.346 Other eligibility criteria.
The applicant must: (a) Be a person who does not own a dwelling in the local commuting area or owns a dwelling which is not structurally sound, functionally adequate.
• BE a U.S. CITIZEN, a U.S. NON-CITIZEN NATIONAL, OR HAVE QUALIFIED ALIEN STATUS
• PURCHASE a RESIDENTIAL PROPERTY THAT IS LOCATED in a RURAL DEVELOPMENT ELIGIBLE AREA