Adair is proud to now offer USDA construction loans! Build a custom home with a lower credit score, less income, and no down payment.
With almost 50 years of experience building custom homes in the Pacific Northwest, we know that financing is one of the steps new homeowners dread most. We also know that people come to us so they can get more home for their budget with our unique equity-building process. These are some of the reasons we have partnered with Alliance Financial and all of our branches now offer USDA single-close loans for qualified customers. Providing a financing solution that reduces loan costs and includes expenses that other loans do not means that even more people can build their dream homes with Adair.
USDA Loan Basics
USDA single-close construction loans combine a new construction loan with permanent financing so that you only have to go through the closing process one time. Once construction is complete, the loan will automatically convert to a 30-year mortgage. This saves you both time in the financing process and money on closing costs.
USDA Loan Requirements
In order to qualify for a USDA loan, you must meet the following criteria:
* Have an income below a certain level, which varies by state and county
* Use the home as your primary residence (no rentals or vacation homes)
* Purchase property that meets the program criteria
In the Pacific Northwest, the vast majority of property is eligible, with the exception of major metro areas such as Seattle, Portland, Spokane, and a few others. The income limits for each county are higher than you might expect, so if you’re not sure if you qualify, it’s worth exploring to see if a USDA loan is an option for you.
When building with a USDA loan, the builder must also meet certain requirements, such as:
* At least two years of experience building homes
* A contractor license
* At least $500,000 in commercial liability insurance
* A good credit history and no open judgments
* A clean background check
* A new construction warranty program
Fortunately, Adair Homes meets all of these criteria and is able to offer USDA loans to all of our customers who qualify.
USDA Loan Benefits
USDA single-close loans are intended to make homeownership more accessible to people who live in rural areas and have low or moderate incomes. The program allows you to build a new home with a lower credit score and lower income than many other types of financing solutions. There is also no limit to the size of the property, which means that unlike other types of loans, you can finance more than ten acres.
Additionally, out-of-pocket costs are attainable because you can include the following in the loan:
* Down payments
* Closing and other transaction costs
* Utility connection fees
* A pro rata share of real estate taxes
* Essential household equipment, including appliances
* Energy efficiency features
* Site development costs
* Purchase of land
* Design costs
* Surveys, permits, and inspections
All of this enables people who do not have a lot of cash on hand but who do have the ability to consistently make monthly payments to build a new custom home. In some cases, the USDA can also set up a payment reserve account, which means that during the construction process, loan payments are made directly from the financing funds.
Working with Adair Homes
Our Home Ownership Counselors walk you through every step of the homebuilding process, including securing financing with the solution that best matches your needs. Once you know how much is available to build your new home, we’ll help you create a budget that includes the costs of land, the house, and site development. Based on this information, you can choose the floorplan and features that fit your budget and your lifestyle.
If you’d like to learn more about building with Adair Homes, either with a USDA loan or any of our other financing options, contact us today.