Rates are up today. Initial claims for state unemployment benefits were lower than expected. Today’s rates with no lender fees are 4.125% on a 30 year fixed, 3.5% on a 15 year fixed, and 2.875% on a 5/1 ARM (click here to get the details).

Today I’ll talk about some restrictions on the USDA home loan. It still remains one of the best financing options if you and the house qualify, but there are a few guidelines that may disqualify you from the financing.

Today’s video is a real barnburner:


(Watch it on your mobile phone or email reader here)

Are you wondering if you are in an area where USDA financing is available? The USDA website has a map of areas that qualify.

The biggest issue I see right now is the restriction on outbuildings for the USDA home loan. If the property you are looking at has an outbuilding that could be used for any type of farming function, it will automatically disqualify that house from USDA financing.

It doesn’t matter what your intentions are for the outbuilding in the future; if it looks like a farm building, it is a farm building. The only way to prevent this from hurting your USDA financing is removing it. Burn it down if you have to!

I actually had a lender tell me he had a seller burn down his barn so the buyer could get USDA financing. The housing market is so tough that some sellers are willing to set part of their property on fire to find an approved buyer!

The other issue that my prevent you from getting USDA funding is any income-producing land or buildings. You can’t have a type of property that is set up for any type of business or income-producing purpose.

If you claim any income on a Schedule F or farm income, you will be denied. So don’t raise chickens in your backyard and sell the eggs to your neighbors. It may sound like a good idea, but it will disqualify you from a mortgage.

If you thought this was good information or worth discussing, help me bring transparency to mortgage lending by sharing today’s episode on Facebook or Twitter.

Let’s change the way people shop for a mortgageā€¦forever!

– Mike

PS. To ask a question, get advice, or find out if you’re getting the best deal possible on your loan, just post a comment below. Daily comparison rates, calculators, and other cool features are available in the free Rates in Motion LoanApp by going to your smart phone and clicking on this link, activation code is 9203780002

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