The biggest obstacle stalling USDA loan applicants is the income. It is not as demanding as one may think, for the program has brackets set aside and marginal income increases needed for more residents. There is a detailed chart for income available at the official usda loans website. It details exactly how much income must be received to receive a loan. It varies by the state, and follows income averages of that particular region. The specifics may vary depending on the county within the state. Also consider that not all counties are fully participating in the usda loans program. The website also has a chart of neighborhoods which are in high demand, as well as cities which are currently accepting applications (or pending).

Income Needs: Brackets and Residents

The two main factors that change income requirements are the number of people residing in the home and the income bracket. For example, the income needs increase based on people. It goes up roughly 5% for each added person (children included). The head of the house must make more to accommodate more people within the home. The income bracket may not affect whether the application is approved or denied. An individual with very low income may still be able to get a loan, but the loan cap will be lower. The best rating for an applicant is moderate-income, which must be guaranteed (salary pay fits into this category very well).

Staying in the Home

Once the income requirements are met, applicants need to consider the long-term. USDA loans are not issued to investors, or at least not people who are deliberately investing with no intention of residing in the home. The loans are specific for potential retail buyers, so a buyer must be willing to reside in the home for the duration of the loan. There are legal consequences for not doing so.

The USDA loan program is very forgiving. Applicants with bad credit can still be approved. The income is a big hurdle for many, but the program representatives want to see confirmed income. Even if the income is marginal, the program can make it work.