What counts as "housing costs" for USDA loan?

Caution: generally you cannot own another home in the same area and still get a USDA loan. Your lender may not be very familiar with USDA rules. I've done one where the borrower was relocating to a new area, and I believe there is another exception if you can document the current home is too small to accomodate your family size (changed since you purchased a small home). Otherwise you'll need to use a different type of mortgage, either FHA with 3.5% downpayment or conventional. The 29% isn't firm and would NOT include the payment on the former house, nor would it count as part of your "front ratio" for other loans, but it would count as part of the total debt. IF it is in the same area you will not be able to count any rental income from your current residence toward qualfying to purchase a new loan. Be careful that you are working wtih a knowledgable and experience mortgage lender....

I think you need a new loan officer.. one whose more familiar with how ratios are calculated. Your "Housing Costs" are the costs associated with your primary residence.. Principal, interest, property taxes, homeowners insurance, Mortgage insurance, association fees or dues, or any other type of assessment associated with your primary residence are combined to show your total housing costs. Typically, the lender wants to see 29% of your gross income or below, but this is not the cast in stone, and has some flexibility.. the main ratio is the overall debt to income ratio.. this is much more important.. Also, with USDA, there are " Maximum Household Income" restrictions.. The income from all household members are considered in calculating this number.. if the full time student is making more than $3000 annually, then you would exceed the maximum allowable household income for USDA.. Also, it's highly unlikely you will find any USDA eligible properties in Detroit.. In order to obtain USDA financing, you need to purchase a home in a USDA defined area.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

ANY USDA approved lender can help you and it would be unusual for USDA staff to recommend one vs. others. Most lenders DO offer USDA loans but the experience level of loan officers can vary from company to company (just like some are not as familiar with FHA or VA financing). You do need someone who is experienced with these loans and the process and guide you with accurate information. The first thing I'd be checking is the details on the other home you already own, normally that is not allowed with these loans if the home is in the same area you are looking