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USDA New Construction Loan | Requirements & Guidelines

byNicholas Auriemma, NMLS# 1455001
4 years ago
inPurchase, USDA Loan
USDA New Construction Loan Requirements & Guidelines

USDA New Construction Loan | Requirements & Guidelines

Looking for a USDA new construction loan without having to pay closing costs twice? This USDA new construction loan allows you to finance the lot, construction costs, and permanent financing all in one loan. You do not have to pay for a second appraisal, re-qualify for permanent financing, or incur additional costs due to the USDA new construction loan requirements.

Advantages

You do not have to worry about re-qualifying or incurring additional costs on permanent financing because the permanent loan is closed before the construction begins. This simplifies the process through a streamlined USDA new construction loan.

Key Factors – USDA Loan for New Construction

  • Closing costs are reduced due to the nature of the single closing.
  • Loan closes prior to construction, which no re-qualification is required after construction is complete.
  • No mortgage payments are due until the construction is complete.
  • Streamlined process.
  • Interest rate is locked prior to construction.

Property Types

Eligible properties include new site stick-built homes, new manufactured, and modular homes.

Ineligible property types include multi-units, condominiums, single-wide manufactured homes, attached or semi-detached, or unique construction types.

Land can be purchased, gifted following USDA gift guidelines, or owned.

USDA New Construction Requirements

  • 100% loan-to-value in USDA eligible areas up to the USDA area loan limit.
  • Owner occupied properties only.
  • Guaranteed Underwriting System (GUS) approved findings, which needs to be run to determine your eligibility for a loan.
  • Debt-to-income ratios are determined by GUS.
  • Must meet the USDA income limits.
  • Minimum FICO credit score of 620.

Builder/Retailer Advantages

Builder/Retailers are not required to have a bridge loan for construction, which often requires larger down payments and offer less favorable interest rates. The borrower does not have to re-qualify – reduces the chances of a borrower’s current credit situation changing during the construction process.

Other Types of New Construction Loans

  • FHA new construction loan
  • VA new construction loan
  • Investment new construction loan
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Nicholas Auriemma, NMLS# 1455001

Nicholas Auriemma, NMLS# 1455001

Nicholas Auriemma is a Loan Originator at Nationwide Mortgage & Realty, LLC, providing information on mortgages that can often be confusing even to real estate and mortgage professionals. Borrowers can be discouraged because mortgage professionals can be mistaken due to guidelines always changing, the extent of guidelines, their company having an overlay (stricter guideline), or other lenders not offering a loan program. Call or text Nick anytime at 630-779-8430 or email at nick@nationwidemtg.net.

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  • Home
  • Request Information
    • Apply Now
  • About Us
    • Career Opportunities
    • Contact Us
    • Meet the Team
  • Purchase
    • Conventional Loan
    • Condotel & Non-Warrantable
    • FHA Loan
    • FHA 203k
    • Fix & Flip
    • Investment
    • Jumbo & High Balance
    • New Construction
    • Non-QM Loans
    • USDA Loan
    • VA Purchase Loan
  • Refinance
    • Cash Out & Debt Consolidation
    • Conventional Refinance
    • Condotel & Non-Warrantable
    • FHA 203k
    • FHA Streamline Refinance
    • Investment
    • Non-QM Loans
    • Reverse Mortgage
    • VA IRRRL
  • Loan Process
    • Application Checklist
    • Credit Report
    • Home Buying Do’s and Don’ts
    • Interest Rates
    • Mortgage Calculator
  • Mortgage Blogs
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Nationwide Mortgage & Realty, LLC
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​Oakbrook Terrace, IL 60181
NMLS # 276777
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