Buying a home can be an exciting milestone – but for many new and budget-conscious buyers, it can seem like a goal that’s simply out of reach. Fortunately, there is a government-backed home financing program that allows low- to moderate-income borrowers to purchase a home with zero money down. This program is supported by the United States Department of Agriculture (USDA) and are aptly named USDA Rural Development Guaranteed Housing Loan Program – or just USDA loans for short. These loans can make homeownership a much more affordable and accessible option for first time buyers and buyers on a smaller budget. The caveat to this no money down program is that the home must be located in a USDA-eligible area, typically an area that is considered rural or less developed by the USDA’s standards.
So, how do you determine whether or not a home is located within USDA-eligible boundaries? For Californians, there are many regions that are eligible for USDA home financing. If you’re hoping to find a USDA-eligible home in California, you’ll be glad to know that the majority of the state is currently USDA-eligible. However, the major cities and even the smaller cities will have fewer sections of eligible territory. For example, Santa Clarita has little to no USDA-eligible space. However, if you move your search outside the city, say more toward Val Verde or Castaic, west of Interstate 5, there is a great deal of eligible space. Here are a few homes for sale in that area that are USDA-eligible at the time of this writing:
31204 N Heavenly Way
3 Beds, 2 Baths
31211 Lakeview Way Unit 37
2 Beds, 2 Baths
There are also eligible zones just outside the cities of Fresno, Sacramento, Modesto, Redding and more. Here are a few more listings we came across in some of these areas:
12957 Covey Street
Waterford, CA (east of Modesto)
2 Beds, 1 Bath
21695 Knights Road
Knights Landing, CA (northwest of Sacramento)
3 Beds, 2 Baths
1445 Orange Street
Red Bluff, CA (south of Redding)
3 Beds, 2 Baths
USDA Loan Income Limits 2016
In order to be eligible for USDA home financing, the property must be in a USDA-eligible zone, but the borrower must also meet certain requirements, namely they must fall below the maximum income limits for their area. Note that USDA income limits vary by area. In San Francisco, for example, the 2016 USDA income limits are $131,100 for a 1-4 member household and $173,050 for a 5+ member household. In San Diego, the limit is $95,000 for a 1-4 member household and $125,400 for a 5+ member household. In Fresno, the 1-4 member household limit is $74,750 and the limit for a 5+ member household is $98,650.
You can look up the income limits for your area here.
Where to look up USDA Eligible Homes in California
Got a particular property in mind? You can visit the USDA’s Property Eligibility Map online, enter the address, and find out if the home is eligible for USDA financing. It’s quick, easy and will help you narrow down your home search in minutes. If you’re already working with a real estate professional, you can ask them to search for USDA-eligible homes for you. Keep in mind, however, that narrowing your search to only USDA-eligible homes could make your choices pretty slim. To broaden your search a little and still enjoy low or zero money down home financing, you can talk to us about a California FHA loan, which only requires 3.5% down. Or, if you’re active duty military or a U.S. military veteran, you may be eligible for a $0 down VA loan. Even some surviving spouses are eligible for 100% financing through VA loans.
The bottom line is, as a California mortgage borrower working with Resource Lenders, you have options. We can discuss your needs, budget and qualifications together to find the best home loan solution for you. Let’s get started today! Simply reach out to us by phone at (800) 564-4342 or by completing the form on this page for a free rate quote and California mortgage consultation.