Merritt Island, FL USDA Eligibility

USDA Eligibility Guide

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Merritt Island, FL USDA Loan Eligibility Guide

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

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    More About Merritt Island, Florida

    Merritt Island is a peninsula, commonly referred to as an island, in Brevard County, Florida, United States, located on the eastern Florida coast, along the Atlantic Ocean. It is also the name of an unincorporated town in the central and southern parts of the island and a census-designated place (CDP).

    The population was 34,518 at the 2020 census. It is part of the Palm Bay – Melbourne – Titusville, Florida Metropolitan Statistical Area.

    NASA’s John F. Kennedy Space Center is located on Merritt Island to the north of the town, and Merritt Island National Wildlife Refuge is located north of the space center.

    The central part of Merritt Island, previously known as Merritt City, is home to the majority of the population and includes the local high school, library, and shopping district. The southern area is heavily residential, with centralized light commercial and light industrial areas.

    Merritt Island owes its name to the King of Spain. The entire island was part of a land grant given by the King to a nobleman named Merritt.