Guaranteed USDA Mortgage Program in Fairplay, Colorado
What is a USDA Guaranteed Loan?
A USDA guaranteed loan is a zero down payment residential mortgage program intended for rural areas in the United States. The purpose of the program is to encourage home ownership in rural areas with lower populations. Great news! The entire City of Fairplay, CO and surrounding areas are eligible for USDA financing!
What are the Benefits of a USDA Home Loan?
• 100% No Money Down Home Loans. Don’t need down payment assistance or grant programs.
• Very Competitive Interest Rates. More competitive than conventional loans.
• Backed and Secured by the Federal Government.
• Low Monthly Mortgage Insurance Compared to FHA or other Conventional Loans.
• Purchase and Refinance. Buy a new home or refinance your current home.
• Fixed secured loans – 30 year or 15 year fixed rate loans.
• Not required to be first time home buyer / Can currently own a home but must occupy new home as primary residence.
How to Qualify for a USDA Loan?
• Income limits are based on County. Fairplay, CO is located in Park County so household income needs to stay under the following limits:
$103,350 Maximum Yearly Income for 1-4 person household
$136,400 Maximum Yearly Income for 5+ person household
Important Note: Household income includes anyone over the age of 18 who will be living in the home even if they’re not on the loan.
• Credit Score must be 580+. No exceptions to this rule. We use the middle score of all borrowers applying for the mortgage. If you are unsure of your credit score, please contact us and we can access your credit report together.
• Must occupy home as your primary residence. Cannot be investment or 2nd home.
• Minimum Loan Amount $50,000 / No maximum Loan Amount – This means you can purchase any home above $50,000 as long as your income allows it.
What is the Process to Get a USDA Home Loan
- We take a loan application including your income and credit report. This can be done online through a secured loan application or over the phone.
- We’ll run your loan application through an automated underwriting system called GUS. This will tell us if you are automatically approved or your loan needs to be manually reviewed by an underwriter. We may ask for income documents from you at this time.
- If we do not receive an automated approval from GUS, we will send your loan into underwriting so your income and credit can be reviewed. This may take a few extra days but it will guarantee that you will qualify for the loan before you start looking at properties.
- Once your pre-approval is complete, we will issue a pre-approval letter so you can begin house hunting.
- Find a real estate agent who can help you look for homes
- Go under contract
- Provide us the necessary documents to process your mortgage and order appraisal.
- Close the loan. Typically takes 30 days or less.
USDA Eligible Properties
» Single Family Homes
» New construction
» HUD approved Condos
» Town homes
» HUD approved Manufactured homes / Must be on a permanent foundation
» Storage buildings/workshops are acceptable
» There is no maximum acreage limit. Property must be typical for the area AND the value of the land should not exceed 30 percent of the property value.
» No income producing properties. Home based businesses are okay.
» Farms not allowed but farm animals are okay as long as not for income producing purpose
» The guaranteed USDA program is not intended to purchase land on its own
Why choose us as your USDA lender?
• We DO NOT sell your information to a million other lenders. We are an actual lender who originates USDA loans in Fairplay, CO.
• Low mortgage rates. We have some of the most competitive mortgage rates in the State.
• We’re able to help cover your closing costs. Why is this important? Even though USDA is 100% financing, we still need to deal with closing costs. Closing costs can be covered by the seller but in some cases the seller will refuse. We have the ability to give you a lender credit to help pay for some or all your closing costs. This is done by giving you a lender credit in return for a slightly higher interest rate.
• Local Denver lender familiar with local guidelines
Other Eligibility Links & Info
Use the links below to see if you’re eligible for a USDA loan. You can also contact us and we can assist you with your questions and guide you through the process. Make sure you are looking under the “Guaranteed” program and not the “Direct” program.
Free Fairplay, CO Property Search – Don’t need to register / connected directly to the live MLS
USDA vs FHA vs Conventional (Which is better)
- FHA requires 3.5% down payment / USDA does not require a down payment.
- Although FHA and USDA rates are very similar, USDA has much lower monthly and upfront mortgage insurance. That means your monthly payment will be lower and you will pay a smaller upfront government fee. On a $200,000 home purchase, your USDA payment would e about $50-$80 less. You would also save about $1500 in upfront mortgage insurance fees which will lower your closing costs.
- USDA loans do not have maximum loan amounts. FHA loan amounts are limited based on County limits.
- FHA loans do not have limitations on location but USDA is limited to eligible rural areas only.
- USDA loans are more strict than FHA regarding income and credit. For example, we can do an FHA loan with a 580+ credit score but USDA requires 620+.
- USDA mortgages have household income restrictions. FHA and conventional loans do not have income limits.
- Conventional loans might offer better terms if buyer/homeowner has a high credit score and large down payment.
If you’re looking to purchase a home in Fairplay, the USDA guaranteed mortgage program may be a great option if your credit score is above 580 and your income is sufficient to qualify for the loan. Contact us if you have any questions or would like to get approved before you start looking at homes.