Want to buy a home but are disheartened by the conventional loan programs? There’s nothing to worry. USDA loans are here help you. Specially designed for people belonging to low income groups, USDA home loans allow the borrowers to buy, repair or build a new home of their own. Unlike the other conventional loan programs, USDA loans have the most flexible guidelines and are very affordable.
If you want to buy a home with zero down payments, USDA home loan is you only option. You also get 100% financing and low interest rates. All the USDA loans are fixed rate loans which mean there is nothing to worry about fluctuations in the interest rate. You exactly know how much to pay each month. Like all other loan programs USDA also requires you to qualify to the income and credit guidelines, though they are much lenient and flexible than any other loan program. One other thing that you should consider while applying for USDA loans is that, you need to have an appraisal of the property to be financed. This is essential to ensure everything goes on smoothly.
What is Home/Property Appraisal?
Property appraisal is a method to determine the actual market value of the property. The property value is determined depending on various factors like location, amenities, condition of the property and other comparables in the same location.
You will have to get in touch with an appraiser who will perform the inspection and provide you with an appraisal report. Based on this appraisal report the bank or financial companies would offer the maximum loan amount.
Appraisal Requirements for USDA
Appraisals are essential to get USDA loans to ensure that the property value is determined properly. Though this may sound daunting, the USDA approved appraisers can handle the process without hassles. Since you are eligible to get 100% financing, it is good to get the appraisal as high as possible. Make sure that you hire an experienced appraiser who is familiar with the USDA appraisal guidelines.
USDA home loans are available for primary residences that are in liveable conditions. The property to be financed must meet the state building codes and must be located in a USDA designated rural area. The appraisals must meet the guidelines as defined by USDA.
If the property you are willing to buy is built less than 2 years from the loan application, an appraisal is must. The appraiser would determine the property value based on various factors like construction quality, location, amenities, and other sale comparisons from the same area. All the conditions must be accurately defined and the appraiser should follow HUD standards. The appraiser will also tell you about the repairs that are needed to make the property functional.
The appraisals must meet the following requirements:
- Qualified Appraisers Only: The appraiser valuing the property must be a state licensed appraiser present on the USDA approved list.
- Must Meet All Standards: All the appraisals must meet the Uniform Standards of Professionals Appraisal Practice.
- Must Meet the Timeline: The applicant must order the appraisal within 3 days of the property getting accepted by USDA.
- No Discriminations are Made: Age, gender, religion, disability, etc should not be considered by the appraiser while valuing the property to be financed.
- Third Party Appraisals: Appraisals by participating lending institutions are accepted by USDA.
All the electrical, mechanical and plumbing systems would be checked by the appraiser to make sure they are in working conditions.
That was, in a nutshell, all about the USDA appraisals. If you have further questions or you wish to know more, please get in touch with us.