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USDA Construction Mortgage Rates

USDA Construction Mortgages

The journey of building your dream home on the perfect property is an important and exciting endeavor. To ensure success, it’s crucial to make wise decisions from the beginning.

Opting for a USDA single close construction loan is a smart choice that can save you both time and money. This loan option is specifically designed to simplify the financing process for building a new home in rural areas, providing you with a streamlined and efficient experience.

USDA requires an income of 115% or less of your region’s median income. For instance, if your area median income is $50,000, you could make up to $57,500 and still qualify.

Increased limits are available to families of five or more. Check your area’s income limits here.

USDA Single Close Construction Loan

Securing financing for a home in a rural area comes with its own set of considerations and complexities, especially when you also have the desire to build a new home. Recognizing these challenges, the United States Department of Agriculture (USDA) offers the USDA single close construction loan as a solution to facilitate homebuyers in financing their homes and stimulate economic development in rural areas.

Through the USDA single close construction loan, you can consolidate the financing for your entire home-building project. This encompasses financing for the purchase of your lot, the construction of your new home, and the long-term mortgage necessary to afford your home once it’s completed.

This integrated approach streamlines the process by allowing you to close on your home loan just once, eliminating the need to secure multiple loans at different stages. As a result, you undergo a single appraisal, work with a single loan originator, and proceed with a single closing process. This not only reduces the overall time required to build and move into your new home but also shields you from unexpected circumstances down the road while saving you from the burden of double closing costs.

Notably, the USDA single close construction loan offers competitive interest rates and does not have a down payment requirement, making it an attractive choice for rural construction projects.

Given the intricacies involved in home construction, with its various moving parts, single close construction loans are specifically designed to simplify the process and provide you with a smoother path to realizing your rural dream home.

Features and Benefits:

• 0% Down Payment for USDA Approved Region for Primary Residence Only
• 660 Minimum credit score
Loan amounts for USDA are specific to each Florida Region – Check your area’s income limits here.
• Rate can be locked at any time during the loan application/process
• Simple and flexible draw process with no set schedules
• Consolidate construction and purchase for only one set of closing costs and fees, loan type and term available in 30-year term only

Eligible Properties Include:
• Stick Built Homes
• Modular Homes
• Multi-Wide Manufactured Homes
• Condominiums

New Construction Program Requirements:
• Maximum Construction Period is 9 months
•  If property is in Wetlands, A Wetlands Certification issued by a local authority and recorded is required
• Max Acreage Is 10 acres
• All programs are Fixed Rate Mortgages with 30-Year term 
• Minimum Loan Amount of $200,000
• Contingency Reserve – Up to 10% for USDA

Not Permitted:

• No Judgments with an outstanding balance; must be satisfied/paid
• No Self-Builds, Self-Help, Sweat Equity are permitted
• Projected rental income on current residence CANNOT be used for qualifying purposes on new construction home
• No Single-Wide Manufactured Homes are permitted

Let’s build your Florida dream home together. Our Mortgage Experts specialize in home construction loans and work with you and your builder from application through completion of your new home. We handle all draws and inspections during construction.

USDA Construction Loans