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I live in Illinois (if that makes any difference) and my USDA loan officer said that they have a formula to figure out how much of the subsidy you have to pay back when you sell your house or pay it off. They figure a repayment figure of about 75% of what they paid and then take off any updates or big changes that you made (so keep your receipts.)
For example she said if they paid $1000 in subsidy then they would expect you to pay back $750 but if you put in a new bathroom (not remodeled existing one) and the amount of materials came to over $750 then you didn't owe them anything.
She also said that they will redo your income info every two years (in the USDA direct program) and if your income goes up to the point where you can get an conventional loan then they can request that you do this to free up their money to help someone else. The formula that they use would then apply because you are essentially "selling" your house (they no longer hold the note.)
If anyone disagrees with what I was told please shout out so that I can ask my loan person some more questions.
@Anonymous wrote:I live in Illinois (if that makes any difference) and my USDA loan officer said that they have a formula to figure out how much of the subsidy you have to pay back when you sell your house or pay it off. They figure a repayment figure of about 75% of what they paid and then take off any updates or big changes that you made (so keep your receipts.)
For example she said if they paid $1000 in subsidy then they would expect you to pay back $750 but if you put in a new bathroom (not remodeled existing one) and the amount of materials came to over $750 then you didn't owe them anything.
She also said that they will redo your income info every two years (in the USDA direct program) and if your income goes up to the point where you can get an conventional loan then they can request that you do this to free up their money to help someone else. The formula that they use would then apply because you are essentially "selling" your house (they no longer hold the note.)
If anyone disagrees with what I was told please shout out so that I can ask my loan person some more questions.
My daughter recently closed with a subsidized loan. If I remember correctly, I think the amount of the subsidy you have to pay back if you sell the home is also dependent upon how long you have lived in the home...that the longer you stay in the home, the percentage of the subsidy you have to pay back goes down.
I'm not sure if this is accurate, but it's certainly something to ask your loan person.
I believe that what you said about making repairs is accurate.