Terre Haute, IN USDA Eligibility

USDA Eligibility Guide

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Terre Haute, IN USDA Loan Eligibility Guide

A USDA (United States Department of Agriculture) mortgage, also known as a Terre Haute, IN 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 Terre Haute, 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:

    • 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 Terre Haute, 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:

      • 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 Terre Haute USDA mortgages, eligibility details can change. It’s always a good idea to consult with one of our Terre Haute, IN USDA home loan professionals. Get pre-approved with our easy and stress free Terre Haute, IN USDA home mortgage today.

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    Mortgage Resource Center

    More About Terre Haute, Indiana

    Terre Haute (/ˈtɛrə ˈhoʊt/ TERR-ə HOHT) is the city that holds the county seat of Vigo County, Indiana, United States, about 5 miles east of the state’s western border with Illinois. As of the 2020 census, the city had a population of 58,389 and its metropolitan area had a population of 168,716.

    Located along the Wabash River, Terre Haute is one of the largest cities in the Wabash Valley and is known as the Queen City of the Wabash. The city is home to multiple higher-education institutions, including Indiana State University, Rose-Hulman Institute of Technology, and Ivy Tech Community College of Indiana.

    Terre Haute’s name is derived from the French phrase terre haute (pronounced [tɛʁ ot] in French), meaning “highland”. It was named by French-Canadian explorers and fur trappers to the area in the early 18th century to describe the unique location above the Wabash River (see French colonization of the Americas). At the time, the area was claimed by the French and British and these highlands were considered the border between Canada and Louisiana.

    The construction of Fort Harrison in 1811 marked the known beginning of a permanent population of European-Americans in the area that would become known as Terre Haute. A Wea Indian village already existed near the fort, and the orchards and meadows they kept a few miles south of the fort became the site of the present-day city. (Terre Haute’s currently affiliated Order of the Arrow lodge of the Boy Scouts of America is named after the last leader of the Wea village, Jacco Godfroy.) The village of Terre Haute, then a part of Knox County, Indiana, was platted in 1816.

    Terre Haute became the county seat of the newly formed Vigo County in 1818, leading to increased population growth. The village’s estimated 1,000 residents voted to incorporate in 1832; the village was elevated to city status in 1853.