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USDA Loans to Purchase Texas Land Outside of Fredericksburg

Posted in: Kerrville Area, Mortgage News/Sources
By SAGE - Premium Texas Real Estate
Jun 12, 2013 - 3:16:25 PM

Buyers with low to medium income who are looking for Texas Hill Country real estate for primary homes may want to ponder purchasing Texas land somewhere just outside of Fredericksburg.  That is because the United States Department of Agriculture (USDA) offers buyers money to live in rural areas.  The USDA rules define rural as less than 10,000 people.  

With over 17-percent population growth in the past decade, Fredericksburg TX homes within the city limits are ineligible.  The 2009 population estimate is 11,305.  However, within minutes of downtown Fredericksburg, there are favorable ranch homes on Texas land, Texas ranches, and qualifying rural areas throughout Gillespie, Kerr, and Kendall counties and other Hill Country communities.

Fredericksburg Texas real estate
and businesses form the hub of Texas Hill Country activities.  Located about 70 miles east of Austin and north of San Antonio, the acclaimed community features a vibrant German-Texan heritage, excellent schools and medical facilities, and it is surrounded by the best of Texas recreation.  

Ponder using a USDA loan to start a farm or ranch or to build a nest.  The program extends to condos, multi-family homes, and single-family homes.

There are two types of USDA loans.  USDA Guaranteed Rural Housing Loans are the most common type of USDA Loan in Texas.  They allow 100 percent financing and higher income levels.  Maximum income must not exceed 115% of median household income for the area.  In 2011, income limits are $73,600 for a household of 1-4 persons or $97,150 for 5-8 persons.  All USDA Guaranteed Loans are set at a fixed rate for 30 years.

Besides income restrictions, applicants must meet these requirements or be able to offer compensating factors:
  • Monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income (29% ratio)
  • Most lenders require a 620 FICO credit score to obtain a USDA Rural Housing Loan approval.
  • Income must be enough to pay housing costs plus all additional monthly debt (41% ratio)

The second type of loan available is the USDA Direct Rural Housing Loan.  These are only available for low and very low income households.  Very low is defined as below 50 percent of the area median income and low is between 50 and 80 percent.  Moderate is 80 to 100 percent.

For expert guidance in your personal search for the ultimate piece of the Hill Country, please call Dale E. Cook, MBA and owner of SAGE - Premium Texas Real Estate at (830) 992-0056.

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Dale E. Cook, MBA, Broker/Owner

Sage - Premium Texas Real Estate
Chase Bank Building
150 E. Main St., Suite 303
Fredericksburg, TX 78624

830-997-1035 office
830-992-0056 cell

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