Determining USDA Maximum Monthly Payments

One of the most common questions asked by perspective USDA loan applicants is “How much is the USDA maximum loan amount?”. While some lenders will cap the maximum USDA loan amount at the conventional loan limits of $453,100, Millennial Home Loans, doesn’t have a maximum loan threshold. Assuming a borrower meets the USDA household income restrictions, determining the maximum amount for a borrower, is predicated upon the following:

  • Analysis of the borrower’s income. This will include salary or base average wages if paid hourly. If the employee has been at their current job for longer than two years average overtime, bonus, and commission can be factored into the wages. If the borrower receives child support and/or alimony that may be considered income. Part time income is acceptable provided the borrower has been at the same job for two years or more.
  • Determining the monthly mortgage payment. Determining the monthly payment includes the principal, interest, monthly property taxes, monthly homeowner insurance, and if applicable homeowner association or condominium dues.
  • Analysis of the borrower’s other debts, which includes:
    • Monthly liabilities from the credit report. If the credit report indicates that there are student loan payments, being paid on a graduated repayment schedule, income based, or deferred payments than the monthly payment will be calculated at 1% of the outstanding student loan balance
    • Child support and/or alimony payments
    • Private loans
    • From the borrowers Tax Returns:
      • Unreimbursed business expenses
      • Business loss
Based on the above calculations the maximum loan amounts will be determined by the USDA Guaranteed Underwriting System approval level, as follows:
  • Accept/Eligible: up to 33.99 for the housing expense and up to 45.99 for the total debt load including the housing expense
  • Refer/Eligible and middle credit score 680 and more: up to 31.99 for the housing expense and up to 43.99 for the total debt load including the housing expense
  • Refer/Eligible with a middle credit score less than 679: up to 28.99 for the housing expense and up to 40.99 for the total debt load including the housing expense
Once a maximum monthly payment is calculated, borrowers can determine the maximum purchasing power available by referencing the Millennial Home Loans maximum offer price calculator by click here.

To learn more about the Virginia USDA Guaranteed Loan program please call (540) 328-9889.

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