Albert Lea, MN USDA Eligibility

USDA Eligibility Guide

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Albert Lea, MN USDA Loan Eligibility Guide

A USDA (United States Department of Agriculture) mortgage, also known as a Albert Lea, 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 Albert Lea, 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 Albert Lea, 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 Albert Lea USDA mortgages, eligibility details can change. It’s always a good idea to consult with one of our Albert Lea, MN USDA home loan professionals. Get pre-approved with our easy and stress free Albert Lea, MN USDA home mortgage today.

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    Mortgage Resource Center

    More About Albert Lea, Minnesota

    Albert Lea (/ˈælbərt ˈliː/ AL-bərt LEE) is a city in Freeborn County, in southern Minnesota. It is the county seat. Its population was 18,492 at the 2020 census.

    The city is at the junction of Interstates 35 and 90, about 90 miles (140 km) south of the Twin Cities. It is on the shores of Fountain Lake, Pickerel Lake, Albert Lea Lake, Goose Lake, School Lake, and Lake Chapeau. Fountain Lake and Albert Lea Lake are part of the Shell Rock River flowage.

    The city’s early growth was based on agriculture, farming support services and manufacturing, and it was a significant rail center. At one time it was the site of Cargill’s headquarters. Other manufacturing included Edwards Manufacturing (barn equipment), Scotsman Ice Machines, Streater Store fixtures, and Universal Milking Machines. As in many U.S. cities, Albert Lea’s manufacturing base has substantially diminished. A major employer was the Wilson & Company meatpacking plant, later known as Farmstead and Farmland. This facility was destroyed by fire in July 2001.

    The city is named after Albert Miller Lea, a topographer with the United States Dragoons, who surveyed southern Minnesota and northern Iowa in 1835, including the current site of Albert Lea. Captain Nathan Boone, a son of Daniel Boone, was the scout for Lea’s unit.

    The city received national attention in 1959 after Local 6 of the United Packinghouse Workers of America went on strike against Wilson & Co., one of the Big Four meatpacking plants at the time, over issues involving mandatory overtime requirements. When Wilson & Co. attempted to operate the plant with replacement workers, violence erupted and split the town. During the 109-day strike, Governor Orville Freeman acted to quell the violence by closing the plant, calling in the Minnesota National Guard, and declaring martial law on December 11. A federal district court in Minneapolis ruled against Freeman on December 23, and the plant turned back to Wilson & Co. just days later.