Hanover, MN USDA Eligibility

USDA Eligibility Guide

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Hanover, MN USDA Loan Eligibility Guide

A USDA (United States Department of Agriculture) mortgage, also known as a Hanover, MN USDA Rural Development Loan, is designed to assist low-to-moderate-income households in purchasing homes in eligible rural and some suburban areas. Here are the general eligibility requirements:
1. Property Eligibility:

    • The home must be located in a USDA-eligible rural or suburban area around Hanover, MN. The USDA provides an online tool to help potential borrowers determine if a specific property is in an eligible area.
    • The property must be used as the borrower’s primary residence.
    • The home must meet all local codes and program regulations.

2. Applicant/Household Eligibility:

    • U.S. citizenship or permanent residency is required.
    • The borrower must be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet.
    • The applicant must have a stable and dependable income, typically verified by two years of consistent employment. The income must also be sufficient to cover the mortgage payment, including taxes and insurance.
    • The household’s adjusted income must be at or below the applicable low-to-moderate income limit for the area.
    • A reasonable credit history. While a specific credit score is not mandated, a credit score of 640 or higher is typically required for streamlined processing. However, those with lower scores may still be eligible but may undergo a more stringent evaluation.

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    3. Income Limits:

    • Income limits vary by county and household size. You’ll need to check with our Hanover, MN USDA service center or the USDA’s online tools to see specific limits.

    4. Loan and Debt Ratios:

    • Typically, a 29/41 ratio is followed. This means that 29% or less of your monthly income can go towards your mortgage (Principal, Interest, Taxes, and Insurance) and 41% or less of your monthly income can go towards your total debt (this includes the mortgage and other debt obligations). Exceptions can be made in certain circumstances.

    5. Other Requirements:

    • Borrowers must personally occupy the dwelling as their primary residence.
    • The borrower must be legally able to take on the loan obligation.
    • First-time homebuyers are required to take a homeowner counseling class in some situations.

    6. Loan Terms:

    • The loan term is typically 30 years.
    • No down payment is usually required.
    • The interest rate can be set by the lender but is subject to USDA review.

    7. Guarantee Fee and Annual Fee:

      • The USDA charges an upfront guarantee fee, which can be rolled into the loan amount.
      • There’s also an annual fee, which is a percentage of the remaining principal amount, typically spread out in monthly installments.

    It’s crucial to remember that while these are the general requirements for Hanover USDA mortgages, eligibility details can change. It’s always a good idea to consult with one of our Hanover, MN USDA home loan professionals. Get pre-approved with our easy and stress free Hanover, MN USDA home mortgage today.

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    More About Hanover, Minnesota

    Hanover is a city in Wright and Hennepin counties in the U.S. state of Minnesota. The population was 3,548 at the 2020 census. Hanover is mainly located within Wright County; only a small part of the city extends into Hennepin County.

    Even though Hanover is partly in the metropolitan county of Hennepin, it does not fall under the jurisdiction of the Twin Cities Metropolitan Council.

    Hanover was laid out in 1877 and named after Hanover, in Germany, the native land of some of the early settlers. A post office has been in operation at Hanover since 1877. Hanover was incorporated in 1891. One property in Hanover, the 1885 Hanover Bridge, is listed on the National Register of Historic Places.

    According to the United States Census Bureau, the city has a total area of 5.59 square miles (14.48 km2); 5.45 square miles (14.12 km2) is land and 0.14 square miles (0.36 km2) is water. County Road 19 serves as a main route in the city.

    Hanover is located along the Crow River. The river flows through the Downtown River District, and serves as the boundary line between Hennepin and Wright counties.