Minnetonka, MN USDA Eligibility

USDA Eligibility Guide

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Minnetonka, MN USDA Loan Eligibility Guide

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

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    More About Minnetonka, Minnesota

    Minnetonka (/ˌmɪnɪˈtɒŋkə/ MIN-i-TONG-kə) is a city in Hennepin County, Minnesota, United States. A western suburb of the Twin Cities, Minnetonka is located about 10 miles (16 km) west of downtown Minneapolis. At the 2020 census, the city’s population was 53,781.

    Minnetonka is the home of Cargill, the country’s largest privately owned company, and UnitedHealth Group, the state’s largest publicly owned company. Interstate 494 runs through the city while Interstate 394 (U.S. Route 12) and U.S. Route 169 are situated along the suburb’s northern and eastern boundaries respectively.

    Since the mid-19th century, Minnetonka has evolved from heavily wooded wilderness through extensive farming and industrialization to its present primarily residential suburban character. The Minnetonka area was home to the Dakota and Ojibwe Native American tribes before Euro-Americans arrived in the 1800s. They believed Lake Minnetonka (mni meaning water, and tanka meaning big, anglicized to Minnetonka) and the land around it to be sacred. The first recorded exploration of the area by Euro-Americans was in 1822, when a group from newly constructed Fort Snelling made its way up Minnehaha Creek (then known as Brown’s Creek or Falls Creek) to the lake. In 1851, the Dakota sold the area including Minnetonka to the United States with the Treaty of Traverse des Sioux. The first census, the Territorial Census of 1857, lists 41 households. Twenty-nine of the heads of households are listed as farmers. The occupations of the remaining twelve are associated with the operations of Minnetonka Mill and a nearby hotel.

    In 1852, a claim was staked on Minnehaha Creek near McGinty Road. The sawmill that was constructed in the thick woods of maple, oak, elm, red cedar and basswood was the first privately operated mill in Minnesota west of the Mississippi River. Oak timbers from this mill were used to build the first suspension bridge across the Mississippi River at Saint Anthony Falls in 1853. The settlement of Minnetonka Mills that grew up around the mill was the first permanent European–American settlement west of Minneapolis in Hennepin County. In 1855, a two-story sawmill was constructed with a furniture factory on the second floor. A building for varnishing furniture was built on the south side of the creek, at the present Bridge Street. Production consisted mainly of chairs and bedsteads.

    In 1860, after only 8 years of operation, the sawmill closed. In 1869, a flour and grist mill were constructed and operated until the late 1880s. In 1874, Charles H. Burwell came to manage the Minnetonka Mill Company, and he built a Victorian home on the north bank of Minnehaha Creek (Minnetonka Boulevard at McGinty Road East) for his family. The Charles H. Burwell House is now on the National Register of Historic Places and is owned by the city. There were two other mills in Minnetonka: the St. Alban’s Mill, which was less than 1 mile (2 km) downstream from Minnetonka Mills on Minnehaha Creek, operated as a flour mill from 1874 to 1881. A grist mill built on Purgatory Creek was washed out in a flood shortly after construction. Minnetonka Mills, with its post office and port for Lake Minnetonka, was the principal business and trading center for a large area until the 1870s.