EDITORS NOTE 2/13/2013: UPDATED USDA INCOME LIMITS ARE PUBLISHED HERE.

USDA offers a government backed program that allows zero down payment on homes that are in a designated rural community for families earning less than a certain income. A majority of Washington State single family residences (homes and condos) qualify…of course if you live in metropolitan areas like Seattle or Bellevue, odds are your home will not. However, if you’re considering areas like Duvall, parts of Maple Valley, Vashon or Bainbridge Island, it may qualify for zero down financing.

To qualify, families must be without “adequate housing” (may not own a home or adequate home), must have reasonable credit history and be able to afford the mortgage (29/41 is the debt to income ratio guidelines).  

Income limits vary by county and the entire household income is considered (not just the primary borrowers or those borrowers on the mortgage) for determining if the income meets the guidelines.  This is separate from income considered for “debt-to-income” ratios.  USDA loans allow incomes up to 115% of the median income for the area.  Income limits vary on household size from 1-4 person or 5-8 person. 

As of the publishing of this article, in Washington, the income limits by county are:

• King and Snohomish Counties: 1-4 Person $93,450 | 5-8 Person $123,350
• Pierce County: 1-4 Person $82,450 | 5-8 Person $108,850
• Island County: 1-4 Person $89,550 | 5-8 Person $118,200
• Kitsap County:  1-4 Person $86,950 | 5-8 Person $114,750
• Thurston County: 1-4 Person $86,250 | 5-8 Person $113,850
• Clark County: 1-4 Person $83,950 | 5-8 Person $110,800
• San Juan County: 1-4 Person $78,050 | 5-8 Person $103,050
• Whatcom County: 1-4 Person $78,000 | 5-8 Person $102,950
• Benton and Franklin Counties: 1-4 Person $76,800 | 5-8 Person $101,450
• Skagit County: 1-4 Person $75,750 | 5-8 Person $100,000
• All other Washington counties:  1-4 Person $74,950| 5-8 Person $98,850

You can check current USDA income limits by visiting the USDA site (clicking here)…be sure to click the “guaranteed” option.   Income limits can and do change. You can also use USDA’s income eligibility calculator which will factor in deductions to income, select the “guaranteed” results (not “direct”).

Income used to determine if a family is under the household income limits includes all those (18 years and older) who will be living in the home regardless of whether or not they’re on the mortgage.  Incomes of children over 18 who working AND who are full time students are not factored. Here is more information of how USDA loans calculate household income.

Once you’ve determined that you meet the household income limits, the next step is to see to see what communities in your area are eligible for USDA financing. You don’t have to go too far from Seattle or Bellevue to find homes that do qualify for this type of mortgage.   Using the USDA site, under “Property Eligibility” click “Single Family Dwelling”.  From there you can either enter a specific address or click on the map to narrow down your search. 

Sellers and real estate agents who are working in neighborhoods that qualify should be sure to include this program as an option they’ll consider for financing on their offers.  

This map is as of the publishing of this post. Areas that are outside of the peachy orange shade are eligible for USDA zero down home loans.

I’m pleased to offer USDA financing as an option for borrowers who meet the criteria. If you have any questions regarding USDA or other mortgage programs for financing homes located anywhere in Washington State, please contact me, I’m happy to help!