Guaranteed Rural Housing and Direct Rural Housing are completely different programs. The Direct program is administered by the local USDA offices and is a loan/mortgage (“directly”
For links to resources throughout this article can be found here:
http://www.madisonmortgageguys.com/
We will be discussing the Guaranteed Rural Housing program. The Guaranteed program is for low to moderate income applicants to purchase a primary residence in a “rural” area of the state. These mortgages are processed, underwritten and serviced by a bank or lender with certain “guarantees”
A PDF of Wisconsin Income Limits will give you the county by county breakdown by family size. Using the USDA Income Calculator to calculate income is more accurate because it is based on area income limit minus any deduction you can take to offset your income. The most common income deduction is for child care expenses.
If, for instance, the income limit for the county in Wisconsin that you are looking to purchase a home is $75,000/year and you and your wife make $80,000/year, combining all types of income, you may still qualify. You also have a child who goes to daycare and full time costs are $800/month. You can take the $9600/year daycare expense and subtract is from the $80,000 gross salary and come up with a net income of $70,400. Now your income qualifies for the program! Keep in mind that this income calculation is for program qualification only. The underwriter will use the full $80,000/year to determine if you qualify to make the payment. For payment qualification, the underwriter will not count bonuses, overtime, part time jobs, etc. unless the income can be verified for more than the past two years.
Now on to the most asked question. Are Wisconsin USDA Rural Housing loans only for "rural" properties? Merriam-Webster defines rural as "of or relating to the country, country people or life, or agriculture"
There are two ways to determine community eligibility. ALL areas of in eligibility are determined by USDA maps, not political or community boundaries.
First, you can view this PDF which is a map of Wisconsin. The counties in white are 100% eligible. The counties shaded green have ineligible areas within the county, except for Milwaukee County which is 100% ineligible. If you are looking for a property in Dane County, you will want to know the area's that are eligible. Open up the PDF map of Wisconsin and click on Dane county. That is going to bring up a PDF map of part of Dane County. The areas shaded in green on the county specific map are ineligible. You can zoom in on the map for a detailed look of the ineligible area. One side of a street or road may be eligible and the other side not.
Secondly, if you know the property address of a property that you are interested in, you can go to Rural Housing's website HERE to determine if a specific address is eligible (click the accept button and then type in the address). If they system is unable to determine eligibility based on the address you entered, that doesn't mean it isn't eligible. It just means the system couldn't find the address, so it is unable to determine eligibility. At this point, you can either call/email us and we will help in determining if the property is eligible or search the address with MapQuest or Google maps to figure out where the address is and then go back to the Wisconsin PDF map, click the county the property is located and zoom in to find the street to determine eligibility. Sometimes it is just a matter of entering the correct format of the street to get the system to find the property (what I call HWY M in Evansville is really County Road M according to the system...).
Still have questions? Visit us online, give me a call or shoot me an email!
Your local Wisconsin mortgage banker:
Dennis Hardy
Toll Free: 877-240-5810 x104
dennis.hardy@
http://www.madisonmortgageguys.com
Visit my blog at http://www.madisonmortgageguys.com/
Resources:
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