What is a USDA loan and What Cities are Eligible?

Capital South Funding helps homebuyers with USDA home loan purchases throughout NC and SC. A USDA mortgage, is a home loan backed by the US Department of Agriculture to help people buy homes in more rural areas without a down-payment. Because you can finance 100% of the purchase price, these home loans are a great option for first-time homebuyers and those with limited resources. Throughout the Carolinas there are many areas that are considered USDA eligible, and some are located right on the edge of a large city so you have to study the USDA map carefully.

On this page, we provide various USDA maps to assist homebuyers with planning for home showings in eligible areas. The sections of the map that are shaded in a beige color are the areas that are not eligible. For example, some areas in the small town of Belmont, NC are eligible for USDA and some areas are not. Check out the following NC USDA maps and the SC USDA maps on this page.  If you need a more "zoomed in" version of a map, please email us at processing@capitalsouthfunding.com and we will email it to you.

More Info on USDA and how it compares to FHA...

USDA mortgages offer numerous benefits to homeowners who are purchasing homes in qualified areas.  To be an eligible borrower for USDA, your household income must be less than 115% of the median household income for the area. In South Carolina and North Carolina, the household income limit is approximately $111,000 for a family of 1-4 people. However, income limits can go up to approximately $153,000 in some counties and for those families with larger households.  Incomes are totaled based on all members of the household over 18 who earn wages whether or not they are on the loan.

Most applicants must qualify based on a good credit score, which is 640 or higher.  If your credit score is lower than this, you should consider an FHA loan, which requires a small down-payment.  Also, with USDA the guidelines are more strict. For example, the debt to income ratio cannot go as high as an FHA loan or a traditional loan.  USDA does require upfront mortgage insurance of 1%, but it is a smaller percentage than FHA's 1.75%.  There is an annual fee of .35% for USDA loans, but it is paid monthly and included in your mortgage payment. This is similar to monthly mortgage insurance but is instead called a Guarantee fee instead of Mortgage Insurance

Is a USDA loan a good option?

If you are looking to purchase a home in a USDA eligible area and meet the more strict requirements of a USDA mortgage, then YES, this is a great option for buying a home with no down payment.