Moorhead, MN USDA Eligibility

USDA Eligibility Guide

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Moorhead, MN USDA Loan Eligibility Guide

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

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    More About Moorhead, Minnesota

    Moorhead (/ˈmɔːrhɛd/ MOR-hed) is a city in and county seat of Clay County, Minnesota, United States, on the banks of the Red River of the North. Located in the Red River Valley, an extremely fertile and active agricultural region, Moorhead is also home to several corporations and manufacturing industries. Across the river from Fargo, North Dakota, Moorhead helps form the core of the Fargo–Moorhead ND-MN Metropolitan Area. The population was 44,505 according to the 2020 census.

    Platted in 1871, the city was named for William Galloway Moorhead, an official of the Northern Pacific Railway.

    The city was platted in 1871 and named for William Galloway Moorhead, a Northern Pacific Railway official and brother-in-law of financier Jay Cooke.

    The former Moorhead Armory on 5th Street South was the site of the intended concert destination for musicians Buddy Holly, Ritchie Valens, and The Big Bopper before their fatal plane crash a few miles north of Clear Lake, Iowa around 1:00 am Tuesday February 3, 1959. The building was demolished in 1990 and is now the site of Ecumen Evergreens, a senior living property.

    Moorhead is home to the first Dairy Queen to sell Dilly Bars. The Moorhead Dairy Queen is also one of only a few Dairy Queens operating on a contract signed in 1949, which allows it to feature products not approved by corporate headquarters. An example includes a chipper sandwich, vanilla ice cream sandwiched between two chocolate chip cookies and dipped in chocolate.