Connecticut is known for its excellent education system, plenty of exciting job opportunities, a mild temperate climate and efficient public transportation. It’s not surprising that more and more families are looking to relocate to this family-friendly state. Most families moving to Connecticut prefer to buy their own home instead of renting. For one thing, home ownership is the ultimate American dream. And secondly, with the real estate market appreciating, it’s a good investment too. If you prefer the wide open spaces instead of cramped city life and are looking to construct your own home in a rural area, what you need to look for is a USDA construction loan Connecticut near me.
What is a USDA construction loan?
A USDA construction loan is a type of that is financed by the Department of Agriculture of the United States. These loans are open to the general public with zero down payment. The loan is a way to buy the land, and own the house built on it in rural areas of the country. One requirement of a USDA construction loan near me is that the property is only accepted for the loan, if they are within a rural area accepted by the USDA.
What are the Other Requirements for a USDA Construction Loan?
- Credit Requirements – The USDA has updated their policies recently about their credit score requirement. The new minimum credit score requirement is 640. Previously, borrowers with lower credit scores would still be approved if they pass the assessments of lenders. You must also have a debt-to-income ratio of no more than 41%.
- Loan Income Requirements – To qualify for a USDA construction loan Connecticut near me, your family must have an income that doesn’t exceed the adjusted median income (AMI) in your area or state.
- Loan Property and Location Requirements – As mentioned previously, the house to be bought must be within one of the USDA-accepted areas of the country. The property strictly must be for primary residence use. Additional houses would not be financed by the USDA.
USDA Construction Loans, What’s the Catch?
Construction loans are considered a package loan. With you being able to seemingly merge the construction and the house loans, it’s one of the best home loan deals on the market. With such great offers for a loan, it’s easy to overlook the negatives of choosing such an option. Understanding the downsides of the loan makes it easier for you to weigh your options, and to ultimately make the better choice.
A USDA construction loan near me may cost more in the long run compared to other mortgages. Though no down payment is required, the borrowers would need to pay PMI. Construction loans, with their “package” like nature, also carry higher interest rates, although they can be lowered over time. Another negative aspect of a construction loan is its rarity. Lenders don’t usually offer this loan, even though they are underwritten by traditional financial institutions.
RESOURCES
When inquiring about a USDA construction loan Connecticut near me, the lender to talk to is USDAHomeLoans. They can help you with their loan services, especially for a USDA construction loan near me.
