USDA Eligibility Guide
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Decatur, IN USDA Loan Eligibility Guide
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- The home must be located in a USDA-eligible rural or suburban area around Decatur, IN. 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:
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- 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 Decatur, IN 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:
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- 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 Decatur USDA mortgages, eligibility details can change. It’s always a good idea to consult with one of our Decatur, IN USDA home loan professionals. Get pre-approved with our easy and stress free Decatur, IN USDA home mortgage today.
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More About Decatur, Indiana
Decatur is a city in Root and Washington townships, Adams County, Indiana, United States. It is the county seat (and the largest community) of Adams County. Decatur is home to Adams Memorial Hospital, which was designated as one of the “Top 100” Critical Access Hospitals in the United States. The population of Decatur was 9,913 at the 2020 census, up from 9,405 at the 2010 census.
The first non-Native American settlers arrived in what is now Decatur in 1835. They arrived as a result of the end of the Black Hawk War as well as the completion of the Erie Canal. They consisted entirely of settlers from New England. These were “Yankee” settlers, that is to say they were descended from the English Puritans who settled New England in the colonial era. They were primarily members of the Congregational Church though due to the Second Great Awakening many of them had converted to Methodism and some had become Baptists before coming to what is now Decatur. The Congregational Church subsequently has gone through many divisions and some factions are now known as the Church of Christ and Church of God. When the New England settlers arrived in what is now Decatur there was nothing but a dense virgin forest and wild prairie.
Decatur was founded in 1836. It was named for Stephen Decatur, Jr., one of the captains of the original six frigates of the US navy. A post office was established in Decatur in 1837.
After the Civil War, Decatur was known as a Sundown Town, where African Americans were discriminated against and eventually run out of the town completely in 1902. In a New York Times article published on July 14, 1902, the headline read, “Negro Driven Away,” and it recounted the story of the violent mob attacks which drove away African Americans from Decatur during the summer of 1902. The last line from the article explicitly concluded, “The anti-negroites declare that as Decatur is now cleared of Negroes they will keep it so, and the importation of any more will undoubtedly result in serious trouble.” A month before the last Black person was reportedly forced out of Decatur, the Indianapolis Freeman reported that 50 men began driving the Black people out because they “were determined that colored people should not live in the town.” Eventually African Americans began slowly settling in town, however, due to the sundown policies that persisted throughout much of the 1900s, the current demographics still indicate a low percentage of Black residents.
According to the 2010 United States Census, Decatur has a total area of 5.786 square miles (14.99 km2), of which 5.78 square miles (14.97 km2) (or 99.9%) is land and 0.006 square miles (0.02 km2) (or 0.1%) is water.