Paying bills is one of those forever things in life. But between the sheer number of bills for the month—rent or mortgage payment, car payment, utilities, credit cards—and the different ways to pay them, it can be tough to keep track of it all.
Making timely payments, though, is essential. Paying bills on time can mean avoiding late fees, higher interest rates, and dings to your credit score. In fact, your payment history—or how often you pay your bills on time—makes up the biggest portion of your credit score.
Fortunately, learning how to pay bills on time is often just a matter of getting organized and setting up a bill payment schedule. Try these tips and tricks to make missing bill due dates a thing of the past.
Take stock of all your monthly bills
First things first: You need to make a list of your bills for the month. Comb through your credit card and bank statements, and even your credit reports, to find typical payment amounts for your rent, utilities, loans, and credit cards. And don’t forget to look for more irregularly scheduled bills, like car insurance or subscription renewals.
Next, record the bills on a spreadsheet, in a budgeting app, or using any “method that will keep you organized and help you pay your bills on time,” says Dan Herron, a CFP® and certified public accountant. Be sure to include payments that are automatically paid out of your checking account or billed to your credit card. For each bill, write down:
Even if you’re a budgeting whiz, there may come a day when you can’t afford to pay all of your bills on time. That’s why you should also organize monthly bills by payment priority.
Using the above list, sort your bills into two groups: higher and lower priority. High-priority bills are for basic needs like shelter, transportation to work, and health insurance, or those that generally must be paid in full. Lower-priority bills are those that are important but offer some flexibility—for example, the ability to make a minimum payment (as is the case for a credit card) or to extend your payment due date.
Now you have a categorization system to help you make smart decisions about how to pay bills during times when you’re short on money.
Optimize your payment schedules
Once you have a monthly bills checklist, you can create a bill payment schedule that turns a slew of payment due dates and methods into a more streamlined system for how to pay bills. Here’s how to create one.
Group bills by due date
Many bills are due around the same time. Go through your monthly bills checklist and group them based on due date similarity.
Change your bill due dates
Some creditors allow you to change your regular bill due date. If you have many bills due at the beginning of the month, you may want to move some to the end of the month for better cash flow (for example, instead of paying a bill on Oct. 1, see if you can move it up to Sept. 30.) Update your bill payment schedule if you make any changes.
Add due dates to a calendar
Once you have your bills organized by due date, add them to a digital calendar and set payment reminders for a week before each bill is due, Herron says.
How to organize your bills
Staying organized is the best way to pay bills each month. What works best for you won’t be exactly the same as for someone else, but there are guidelines for how to pay bills most efficiently.
Create a bill ‘drop zone’
Rather than tossing your paper bills onto an already teetering pile of mail, keep unpaid bills in a dedicated file folder or basket. For electronic bills, create a digital folder for unpaid bills in your email, on your desktop, or in a cloud storage system. Once you’ve paid a bill, move it from the unpaid folder into a paid folder for that month or year, Herron says.
Automate as much as possible
The bill pay feature in your Discover® Cashback Debit account can make paying bills a snap. While automating all your bills comes with the risk of overdrawing your checking account—be sure you have overdraft protection or a connected savings account, Herron says.
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Decide when to pay your bills
Figure out how to pay bills that won’t be automatically paid from your checking account. Will you pay them when they come due or on a specific day or two each month? For example, if you have a bunch of bills due on the 15th of the month, you might decide to pay them all on the 8th of the month.
Take advantage of tech
Good news: You don’t have to rely solely on your memory or your organizational skills to pay your bills on time. Lean on technology for help.
Sign up for reminders from your bank and creditors when your bills are due. You can also receive notices of when payments or checks have cleared and when your checking account balance has dipped below a certain amount.
Also, consider using online bill pay through a checking account, which is one of the best ways to pay bills each month. In addition to automatic payments, this service offers features you can’t get from many other payment methods, such as paying multiple bills from one place and scheduling your bills to be paid in advance.
Have savings ready in case of an emergency
Having savings can help you ride out an emergency—say, a medical issue or a surprise car repair—without skipping a bill payment or taking on debt. Many financial experts recommend having enough money stored up to cover three to six months’ worth of expenses in case of a financial emergency. (Read our guide on adjusting your budget in case of a layoff.)
You can build your savings with sporadic deposits over time, but it’s also a good idea to include saving a regular amount as an “expense” in your budget. And if you have money left over after paying your bills, consider setting aside an additional portion in a separate savings account. “If the account is a high-yield savings account, you can earn some interest while you’re at it,” Herron says.
Ask for help when you need it
If you’re worried you won’t be able to cover all your bills—or you’ve already fallen behind—you have options! While it’s best to contact your creditors before you miss a payment, don’t be afraid to reach out at any point. Many creditors—such as credit card companies, medical providers, and banks—have options to help make paying your bills more manageable. For example, they might put you on a payment plan, adjust your payment due dates, or waive late fees.
Depending on your income level, there are also government programs targeted at helping people pay their utility bills.
Reevaluate and readjust
Managing and paying your bills is not a one-and-done situation. Be sure to keep your monthly bills checklist and bill payment schedule updated throughout the year.
Herron recommends reviewing your credit card and checking account statements weekly to “check your spending and see if there are any bills that you don’t recognize or that have gone up in price.” Not only can this help you stay on budget, but it’s also a good opportunity to cancel any subscriptions you no longer want. If you’re struggling to pay your bills, look for areas where you can reduce your expenses or find a better deal and then take action, like shopping around for cheaper internet service.
You’re in control
Paying bills may never be your favorite thing to do, but creating a system for how to pay bills on time can make you feel much more prepared and secure when the first of the month (or the 15th or the 30th) rolls around.
Automation is one easy step to help ensure your bills get paid on time each month, and a Discover Cashback Debit account makes bill paying simple and straightforward. Plus, it earns 1% cash back on up to $3,000 in debit card purchases each month.1 That’s a win-win for anyone looking to stay current on their bills and make a little extra cash while they do it.
Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.
1ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay® Cash), online sports betting and internet gambling transactions, and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal®, who also provide P2P payments) may not be eligible for cash back rewards. Apple Pay is a trademark of Apple Inc. Venmo and PayPal are registered trademarks of PayPal, Inc. Samsung Pay is a registered trademark of Samsung Electronics Co., Ltd. Google, Google Pay, and Android are trademarks of Google LLC.
Are you eligible for the zero-down USDA home loan?
What if you could secure a USDA home loan that allows you to buy a house with no down payment, competitive mortgage rates, and reduced mortgage insurance costs?
It might sound like a dream, but it’s entirely possible with the USDA mortgage program. Designed to assist low- and moderate-income Americans in becoming homeowners, USDA loans provide incredibly affordable financing options for eligible buyers.
Essentially, USDA mortgages empower individuals to transition from renting to owning, even when they thought homeownership was out of reach.
Verify your USDA loan eligibility. Start here
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>Related: How to buy a house with $0 down: First-time home buyer
What is a USDA loan?
USDA loans are mortgages backed by the U.S. Department of Agriculture as part of its Rural Development Guaranteed Housing Loan program. The USDA offers financing with no down payment, reduced mortgage insurance, and below-market mortgage rates.
Verify your USDA loan eligibility. Start here
The USDA mortgage program is intended for home buyers with low-to-average household incomes. In order to qualify, you must also purchase a home in a “rural area” as the USDA defines it. Those who are eligible can use a USDA mortgage to buy a home or refinance one they already own.
USDA loans offer nearly unbeatable benefits for qualified borrowers. So if this program sounds like a good fit for you, it’s worth getting in touch with a participating lender to find out if you’re eligible.
How do USDA loans work?
The U.S. Department of Agriculture insures USDA loans. Thanks to government guarantees and subsidies, lenders can offer 100% financing and below-market interest rates without taking on too much risk.
Verify your USDA loan eligibility. Start here
Although the USDA backs this program, it typically isn’t the one lending money. Instead, private lenders are authorized to offer USDA loans. That means you can get a USDA mortgage from many mainstream banks, mortgage lenders, and credit unions.
The application process for a USDA mortgage works just like any other home loan. You’ll compare rates and choose a lender, complete an application (often online), provide financial documents, wait for the lender’s approval, and then set a closing day.
The only exception is for very low-income borrowers, who may qualify for a USDA Direct home loan. In this case, you’d go straight to the Department of Agriculture to apply rather than to a private lender.
Types of USDA loans
For eligible individuals and families looking to buy, build, or renovate a home in a rural area, the USDA offers three main mortgage loan types. The loan programs are as follows:.
Verify your USDA loan eligibility. Start here
USDA Guaranteed Loans
Approved private lenders, such as banks and mortgage companies, provide USDA loan guarantees to qualified borrowers. A USDA guaranteed loan is one in which the government backs a portion of the loan, lowering the lender’s risk and allowing them to offer more favorable terms to the borrower. These loans frequently have low interest rates, no down payment, and more lenient credit requirements. The property must be in an eligible rural area as the USDA defines it, and borrowers must meet household income requirements that vary depending on location and household size.
USDA Direct Loans
The USDA also offers the Single Family Housing Direct loan through the Section 502 Direct Loan Program. These loans are meant to help low-income families buy, build, or fix up small homes in rural areas. The USDA, rather than private lenders, provides funding for direct loans as opposed to guaranteed loans. These loans have favorable terms, such as low interest rates (as low as 1% with payment assistance) and long repayment periods (up to 38 years for eligible applicants). Income, creditworthiness, and the property’s location in an eligible rural area determine eligibility for direct loans.
USDA Home Improvement Loan
The USDA’s Single Family Housing Repair Loans and Grants program, also known as the Section 504 program, provides financing for home improvements. This program provides low-interest, fixed-rate loans and grants to low-income rural homeowners for necessary home repairs, improvements, and modifications that make their homes safer, more energy-efficient, and more accessible. However, if you’re looking for one, you might have a difficult time finding this type of USDA home loan. They are not widely available from lenders.
USDA loan eligibility requirements
To be eligible for a USDA home loan, you’ll need to meet a number of requirements that vary depending on whether you are applying for a USDA loan guarantee or a USDA direct loan.
Verify your USDA loan eligibility. Start here
Some general requirements, however, apply to all USDA loans, specifically those based on both buyer and property eligibility.
USDA loan property requirements
Eligible rural area
The USDA defines an eligible area in rural America as having a population of 20,000 or fewer. To check if the property you’re considering falls within these designated areas, the USDA’s eligibility site provides all the necessary information. We also provide a USDA eligibility map below.
Single-family primary residence
USDA loans are exclusively available for primary residences. Neither investment properties nor second homes are eligible for this program.
Meet safety standards
The property must adhere to the USDA’s minimum property requirements, which focus on safety, structural integrity, and adequate access to utilities and services.
USDA loan borrower requirements
Income limits
You must meet USDA monthly income limits, meaning your household income can’t exceed 115% of the area median income. Conforming to USDA income eligibility requirements ensures the program is accessible to those it’s intended to serve.
Stable income
Applicants are required to demonstrate a stable and dependable income, typically for at least 24 months, before applying. This helps ensure borrowers can maintain their loan payments.
Creditworthiness
Although USDA loans are known for their flexible credit requirements, creditworthiness is still important. Lenders usually seek a minimum credit score of 640 for guaranteed loans, with USDA Direct Loans potentially having more lenient criteria.
Debt-to-income ratio
Your monthly debt, including future mortgage payments, generally should not exceed 41% of your gross monthly income. However, lenders may make exceptions based on credit score and available cash reserves.
Citizenship status
Applicants need to be U.S. citizens, U.S. non-citizen nationals, or qualified aliens with a valid Social Security number to qualify for a USDA loan.
USDA loan eligibility map
The USDA eligibility map is a valuable online resource for potential borrowers. It helps them identify if a property is situated in an area of rural America that qualifies for USDA home loans.
Verify your USDA loan eligibility. Start here
Users can enter a specific address or explore areas of the map to see if they qualify for USDA guaranteed loans or direct loans by using this interactive map.
1 Source: USDAloans.com, based on Housing Assistance Council data
USDA loan rates
Compared to other home loan programs, USDA mortgage interest rates are some of the lowest available.
Check your USDA loan rates. Start here
The VA loan, specifically tailored for veterans and service members, stands alongside the USDA loan as one of the few government-backed loan programs offering competitively low rates. Due in large part to the security that government subsidies and guarantees provide, both the USDA and VA programs are able to offer interest rates below the market average.
Other mortgage programs, like the FHA loan and conventional loan, can have rates around 0.5%–0.75% higher than USDA rates on average. That said, mortgage rates are personal. Getting a USDA loan doesn’t necessarily mean your rate will be “below-market” or match the USDA loan rates advertised.
How to get the best USDA mortgage rates
Strengthening your financial standing is essential for obtaining the best USDA loan rates. Here are some helpful techniques for improving your personal finances:
Boost your credit score.Improving your credit score is an important step toward getting the best USDA loan rates. Taking steps to improve your credit score before applying for a USDA loan often proves beneficial.
Consider a down payment. While a down payment is not required for USDA loans, it can demonstrate to the lender your commitment to repaying the loan. This could also help lenders find your application more appealing.
Minimize existing debt.Lowering your debt-to-income ratio (DTI) by paying off existing high-interest debts can make you more appealing to lenders. It demonstrates that you are capable of handling your loan and making payments on time.
Shop around for lenders.Exploring loan options with multiple participating lenders is a smart move that can save you thousands of dollars over the life of the loan. Comparing their interest rates, fees, closing costs, and loan terms can help you identify the most appealing offer. It’s possible that first-time home buyers will find better options than what USDA loans can offer.
USDA loan costs
When it comes to financing a home purchase with a USDA loan, it’s not just the mortgage rate that you need to consider. You’ll be responsible for various fees and costs, which can add up over time. Understanding these costs upfront can help you make a more informed decision and plan your budget accordingly.
Here’s a breakdown of the expenses you can expect:.
USDA mortgage insurance
The USDA guarantees its mortgage loans, meaning it offers protection to approved mortgage lenders in case borrowers default. But the program is partially self-funded. To keep this loan program running, the USDA charges homeowner-paid mortgage insurance premiums.
Verify your USDA loan eligibility. Start here
Upfront guarantee fee
One of the first costs you’ll encounter is the upfront guarantee fee. This fee is a percentage of the loan amount and is required by the USDA to secure the loan. It’s usually around 1% but can vary. You can either pay this fee upfront or roll it into the loan balance.
Annual guarantee fee
Unlike conventional loans that may not require mortgage insurance, USDA loans come with a monthly mortgage insurance premium. You can expect to pay a 0.35% annual guarantee fee based on the remaining principal balance each year.
The annual fee is broken into 12 installments and included in your regular mortgage payment.
As a real-life example, a home buyer with a $100,000 loan size would have a $1,000 upfront mortgage insurance cost plus a monthly payment of $29.17 for the annual mortgage insurance. USDA upfront mortgage insurance is not paid in cash. It’s added to your loan balance, so you pay it over time.
Inspection fees
Before the loan is approved, the property will need to be inspected to ensure it meets USDA property eligibility requirements. This inspection can cost anywhere from $300 to $500, depending on the location and size of the home.
Closing Costs
Closing costs are a mix of fees that include loan origination fees, appraisal fees, title search fees, and more. These costs can range from 2% to 5% of the home’s purchase price. Some of these costs can be rolled into the loan amount, but it’s best to be prepared to pay some of them out-of-pocket.
How to apply for a USDA home loan
Qualifying for a USDA home loan can be a great way to finance a home, especially if you’re looking to buy in a rural area. These loans offer attractive benefits like zero down payments and competitive interest rates.
However, the USDA loan approval process involves several steps and specific eligibility criteria. Here’s a guide on how to apply for a USDA home loan.
Check your USDA loan eligibility. Start here
Step 1: Check your eligibility
Before diving into the application process, it’s important to determine if you meet the USDA’s eligibility requirements. These typically include:
A minimum credit score of 640
A debt-to-income (DTI) ratio of up to 41%
Income limitations, which vary by location and household size
The property must be located in a USDA-eligible area
Step 2: Gather necessary documentation
You’ll need to provide various documents to prove your eligibility, including:
Proof of income eligibility (e.g., pay stubs, tax returns)
Employment verification
Credit history report
Personal identification (e.g., driver’s license, passport)
Step 3: Pre-Qualification
Contact a USDA-approved lender to get pre-qualified for a loan. During this qualifying process, the participating lender will review your financial situation to give you an estimate of how much you can borrow.
Check if you’re eligible for a USDA loan. Start here
Both pre-approval and pre-qualification can give you a better idea of your budget and show sellers that you are a serious buyer.
Step 4: Property search
Once pre-qualified, you can start looking for a property that meets USDA guidelines. Keep in mind that the home must be your primary residence and be located in an eligible rural area.
Working with a real estate agent who has experience with USDA loans can be a big advantage.
Step 5: USDA home loan application
After finding the right property, you’ll need to fill out the USDA loan application. Your lender will guide you through this process, which will include a more thorough review of your financial situation and the submission of additional documents.
Step 6: Property appraisal and inspection
The lender will arrange for an appraisal to ensure the property meets USDA standards. An inspection may also be required to identify any potential issues with the home.
Step 7: Loan approval and closing
Once the appraisal and inspection are complete and all documentation is verified, you’ll move on to the loan approval stage. If approved, you’ll proceed to closing, where you’ll sign all necessary paperwork and officially secure your USDA home loan.
With the loan secured and the keys in hand, you’re now ready to move into your new home!
By following these steps and working closely with a USDA-approved lender, you can navigate the USDA home loan process with confidence. Always remember to consult with your lender for the most accurate and personalized advice.
How do USDA loans compare to conventional loans?
USDA loans and conventional loans both have fixed terms and interest rates, but they’re different when it comes to down payments and fees.
Down payment
USDA loans don’t ask for a down payment, unlike conventional mortgages, which usually require a 3% down payment. FHA loans require a 3.5% down payment. VA loans, like USDA loans, also don’t require a down payment.
Home appraisal
Both USDA loans and conventional loans need an appraisal from an independent third party before the loan is approved.
The home appraisal for a conventional loan determines whether the loan amount and the home’s value match. If the loan amount doesn’t measure up to the market value of the home, the lender can’t get back their money just by selling the house. If you want to know more about the home’s condition, like the roof or appliances, you need to get a home inspector.
For a USDA loan, the appraisal does two things:
Just like with a conventional loan, it makes sure the home’s value is right for the loan amount.
It checks if the home meets USDA standards. This means the home should be ready to live in. For example, the roof and heating should work properly. The appraisal also looks at whether the well and septic systems follow USDA rules.
If you’re looking for a detailed report on the house, hiring a home inspector is still a good idea.
Fees
While conventional loans charge private mortgage insurance (PMI) when you make less than a 20% down payment, this isn’t the case with USDA loans. You don’t need PMI for USDA direct or guaranteed loans.
However, USDA guaranteed loans have a guarantee fee of 1% at closing and then an annual fee of 0.35% of the loan, added to your monthly payment. You can roll the initial fee into your loan amount.
Loan terms
The term for a USDA guaranteed loan is 30 years with a fixed rate. If you get a USDA direct loan, you can have up to 33 years to pay it back. If you’re a very low-income borrower, you might get up to 38 years to make it more affordable.
FAQ: USDA loans
Verify your USDA loan eligibility. Start here
What is the USDA Rural Housing Mortgage and who is eligible for it?
The USDA Rural Housing Mortgage, officially known as the Single Family Housing Guaranteed Loan Program, is a rural development loan aimed at helping single-family home buyers. It’s often referred to as a “Section 502” loan, based on the Housing Act of 1949 that created this program. Designed to stimulate growth in less-populated and low-income areas, this rural development loan is ideal for those looking to buy in eligible rural areas with the possibility of a zero-down payment.
What is the income limit for USDA home loans?
The income limit for USDA home loans is based on your area’s median income. To be eligible for a USDA loan, you can’t exceed the median income by more than 15 percent. For example, if the median salary in your city is $65,000 per year, you could qualify for a USDA loan with a salary of $74,750 or less.
Do USDA loans take longer to close?
USDA lenders have to send each loan file to the Department of Agriculture for approval before underwriting. This can add around two to three weeks to your loan processing time.
Can I do a cash-out refinance with the USDA program?
No, cash-out refinancing is not allowed in the USDA Rural Housing Program. Its loans are for home buying and rate-and-term refinances only.
What’s the maximum USDA mortgage loan size?
The USDA does not set loan limits, but your household income and debt-to-income ratio have a limit on the amount you can borrow. The USDA typically caps debt-to-income ratios at 41 percent. However, the program may be more lenient for borrowers with a credit score over 660 and stable employment or who show a demonstrated ability to save.
Where can I find a USDA loan lender, and what loan terms are available?
You can find a USDA loan lender by visiting the U.S. Department of Agriculture’s website, which maintains a list of approved lenders for the Rural Housing Program. The USDA Rural Housing loan offers a 30-year fixed-rate mortgage only, with no 15-year fixed option or adjustable-rate mortgage (ARM) program available.
Can I receive a gift or have the seller pay for my closing costs with a USDA loan?
Yes, USDA rural development loans allow both gifts from family members and non-family members for closing costs. Inform your loan officer as soon as possible if you’ll be using gifted funds, as it requires extra documentation and verification from the lender. Additionally, the USDA Rural Housing Program permits sellers to pay closing costs for buyers through seller concessions. These concessions may cover all or part of a purchase’s state and local government fees, lender costs, title charges, and various home and pest inspections.
Can I use the USDA loan for a vacation home, investment property, or working farm?
No, the USDA loan program is designed specifically for primary residences and cannot be used for vacation homes, investment properties, or working farms. The Rural Housing Program focuses on residential property financing.
Am I eligible for the USDA if I recently returned to work or am self-employed?
If you are a W-2 employee, you are eligible for USDA financing immediately, as there’s no job history requirement. However, if you have less than two years in a job, you may not be able to use your bonus income for qualification purposes. Self-employed individuals can also use the USDA Rural Housing Program. To verify your self-employment income, you will need to provide two years of federal tax returns, similar to the requirements for FHA and conventional financing.
Can I use the USDA loan program for home repairs, improvements, accessibility, and energy-efficiency upgrades?
Yes, the USDA loan program can be used for various purposes, including making eligible repairs and improvements to a home (such as replacing windows or appliances, preparing a site with trees, walks, and driveways, drawing fixed broadband service, and connecting utilities), permanently installing equipment to assist household members with physical disabilities, and purchasing and installing materials to improve a home’s energy efficiency (including windows, roofing, and solar panels).
Can a non-citizen qualify for a USDA loan?
Yes, along with U.S. citizens, legal permanent residents of the United States can also apply for a USDA loan.
Today’s USDA mortgage rates
USDA mortgage interest rates consistently rank among the lowest in the market, next to VA loans.
USDA loans can be particularly attractive to borrowers seeking optimal financial terms, especially in an environment with elevated interest rates. Prospective homebuyers who meet the criteria for a USDA loan may be able to secure a great deal right now.
To find out whether you qualify for one and what your rate is, consult with a trusted lender below.
Time to make a move? Let us find the right mortgage for you
1 Source: USDAloans.com, based on Housing Assistance Council data
You don’t necessarily need a four-year degree to have a rewarding career that pays well. In fact, there are plenty of jobs out there that don’t require a bachelor’s degree and meet a wide variety of talents and interests, from nursing to mechanical technicians.
Here’s an explainer of what exactly is a “trade job,” plus a list of 25 of the highest-paying trade jobs as of 2022, which is the latest data available from the Bureau of Labor Statistics.
What Is a Trade Job?
A trade job is a career that requires advanced training and skill that can be acquired outside a four-year bachelor’s degree. Instead, experience can be acquired through on-the-job instruction, apprenticeship, or vocational schooling. 💡 Quick Tip: Online tools make tracking your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.
Highest-Paying Trade Jobs
If you’re interested in a job that doesn’t require a college degree, or you love working with your hands, consider this list of some of the highest-paying trade jobs in the U.S. The compilation shows average annual salary and was compiled from the Bureau of Labor Statistics.
By the way, most if not all trade jobs require workers to be on site. Working remotely is not an option.
1. Power Plant Operator, Distributor, and Dispatcher – $97,570
Requirements: High school diploma or equivalent, long-term on-the-job training
Duties: Control power plants and the flow of electricity from plants to substations, which then deliver power to homes and businesses.
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2. Real Estate Broker – $52,030
Requirements: High school diploma or equivalent. Must complete some real estate courses to be eligible for licensure.
Duties: Help people buy and sell properties.
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3. Registered Nurse – $81,220
Requirements: Bachelor’s degree in Nursing, Associate degree in Nursing, or a diploma from an approved nursing program. Registered nurses must be licensed.
Duties: Help provide and coordinate patient care.
4. Dental Hygienist – $81,400
Requirements: Associate degree
Duties: Provide preventive dental care and examine patients for signs of oral diseases.
5. Water Transportation Worker – $66,100
Requirements: Will vary by job. For example, there are no requirements for entry-level sailors, while other workers might need to complete Coast Guard–approved training.
Duties: Operate and maintain vessels that carry cargo and people on the water.
6. Diagnostic Medical Sonographer – $78,210
Requirements: Associate degree
Duties: Operate special imaging equipment to create images of patients’ internal organs or to conduct tests.
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7. Farmer, Rancher, or Other Agricultural Manager – $75,760
Requirements: High school diploma or equivalent
Duties: Run farms and other establishments that produce livestock, dairy products, or crops.
8. Gas Plant Operator – $79,460
Requirements: High school diploma
Duties: Help distribute or process gas for utility companies by controlling the compressors on main gas pipelines.
9. Pile Driver Operator – $70,220
Requirements: High school diploma and vocational training can be helpful.
Duties: Operate machines that drive pilings for retaining walls, bulkheads, and foundations of buildings, bridges, and piers.
10. First-Line Supervisor of Construction Trades and Extraction Workers – $77,650
Requirements: High school diploma and five years or more work experience
Duties: Directly supervise and coordinate the activities of construction or extraction workers, such as miners or those drilling for minerals.
11. First-Line Supervisor of Mechanics, Installers, and Repairers – $76,020
Requirements: High school diploma, some work experience
Duties: Directly supervise and coordinate mechanics, installers, and repairers. They may also advise customers seeking recommendations for services.
12. Legal Support Worker – $59,200
Requirements: Associate degree
Duties: Perform a variety of tasks to support attorneys such as interviewing clients, legal research, and case summaries.
13. Locomotive Engineer – $73,850
Requirements: High school diploma
Duties: Operate passenger and freight trains safely. May also coordinate train activities or control rail yard signals and switches.
14. Subway and Streetcar Operator – $75,880
Requirements: High school diploma or equivalent
Duties: Operate subways or elevated suburban trains that don’t have a separate locomotive, or may operate an electric-powered streetcar. May handle fares.
15. Line Installer and Repairer – $82,340
Requirements: High school diploma or equivalent
Duties: Install and repair lines for electrical power systems, telecommunications, and fiber optics.
16. Computer Network Support Specialist – $59,660
Requirements: Entry-level requirements may vary, but network support specialists usually need to have an associate degree. Applicants to these jobs may qualify with high school diploma and information technology certifications.
Duties: Provide technical support to computer users while also maintaining computer networks.
17. Claims Adjuster, Examiner, and Investigator – $72,040
Requirements: High school diploma or equivalent
Duties: Evaluate insurance claims and act as an intermediary between claimants and the insurance company.
18. Electrical and Electronics Installer and Repairer for Transportation Equipment – $71,740
Requirements: Specialized training at a technical college
Duties: Install and maintain mobile electronics communication equipment on trains, watercraft, or other mobile equipment.
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19. Avionics Technician – $70,740
Requirements: Some may obtain a degree or certificate from a Federal Aviation Administration–approved aviation maintenance technician school, while other candidates may be trained on the job or in the military.
Duties: Repair and perform scheduled maintenance on aircraft.
20. Fire Inspector and Investigator – $65,800
Requirements: High school diploma, on-the-job training, and typically some experience as a firefighter
Duties: Fire inspectors help ensure buildings meet federal, state, and local fire codes and inspect buildings for potential fire hazards.
21. Transit and Railroad Police – $76,380
Requirements: Typically you must have a high school diploma or equivalent, complete a transit and railroad police training program, and receive a passing grade on a law enforcement exam from your state.
Duties: Help protect employees, passengers, and railroad and transit property.
22. Insurance Sales Agent – $57,860
Requirements: High school diploma or equivalent
Duties: Work with clients and customers to explain and sell various types of insurance.
23. Media and Communication Equipment Worker – $74,490
Requirements: High school diploma or equivalent
Duties: Install, repair, and maintain audio and visual systems across various industries, such as corporate offices and the film industry.
24. Boilermaker – $66,920
Requirements: High school diploma or equivalent
Duties: Install, maintain, and repair boilers.
25. Construction and Building Inspector – $64,480
Requirements: High school diploma or equivalent
Duties: Inspects buildings to ensure they are structurally sound and in compliance with specifications, building codes, and other regulations. May focus on a specific area such as plumbing or electrical systems. 💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.
The Takeaway
On the high end, trade workers can make $90,000 or more at a career that doesn’t require a college education. That’s well above the $59,540 that represents the annual median income of U.S. full-time workers. And with a diverse range of career options to choose from, individuals who choose a trade job have a good chance at finding a fulfilling career that matches their interests and personality.
As your career takes off and you start earning a salary, you’ll likely want to begin budget planning and setting financial goals like paying down debt and saving for your future.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
See exactly how your money comes and goes at a glance.
Photo credit: iStock/kali9
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Embarking on a home renovation to transform your living space is an exciting endeavor. Home improvements are also an investment that can significantly increase the value of your property, so it’s important to track expenses to be prepared for capital gains tax when you sell your home. Tracking home improvement costs can also help homeowners stick to a budget and ensure a greater return on investment.
Let’s take a closer look at how to track home improvement costs, which upgrades qualify for tax purposes, and options for financing a home renovation.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
Why Track Home Improvement Costs?
Amid all the work and logistics that goes into renovations, tracking home improvement costs might not feel like a high priority. However, having documented home improvement costs can help reduce potential capital gains tax when it’s time to sell your home.
The IRS allows qualifying home improvement costs to be added to the original purchase price of the property, known as the cost basis, when calculating capital gains on a home sale. The basis is subtracted from the home sale price to determine if you’ve realized a gain and subsequently owe tax. But by adding home improvement expenses to your cost basis, the profit from the sale that’s subject to taxes decreases — lowering or even potentially exempting you from property gains tax.
Besides home improvements, other factors that affect property value, like location and the current housing market, could make a property sale subject to capital gains tax.
Here’s an example of how capital gains tax on a home sale works: A married couple that purchased a home for $200,000 in 2001 and sold it for $750,000 in 2024 would have a $550,000 realized gain. Assuming that the sellers made this home their main residence for two of the last five years, they’d be able to exclude $500,000 of the gain from taxes. The remaining $50,000 would be taxed at 0%, 15%, or 20% based on the sellers’ income and how long they owned the property.
However, the sellers spent $70,000 on home improvements during their 23 years of homeownership, so the capital gains calculation would be revised to: $750,000 – ($200,000 + $70,000) = $480,000. Tracking home improvement costs in this example exempted the sellers from needing to pay capital gains taxes.
Note that single filers may exclude only the first $250,000 of realized gains from the sale of their home. Eligibility for the exclusion also requires living in the home for at least two years out of the last five years leading up to the date of sale. Those who own vacation homes should note that the IRS has very specific rules about what constitutes a main residence. 💡 Quick Tip: A Home Equity Line of Credit (HELOC) brokered by SoFi lets you access up to $500,000 of your home’s equity (up to 90%) to pay for, well, just about anything. It could be a smart way to consolidate debts or find the funds for a big home project.
Qualifying vs Nonqualifying Improvements
The IRS sets guidelines that determine what home improvements can be added to your cost basis for calculating capital gains tax. Thus, not every dollar spent on sprucing up your home’s curb appeal or living space needs to be tracked for tax purposes. Generally, tracking costs is a good idea for any home improvements that increase your home’s value and fall outside general repair and upkeep to maintain the property’s condition.
Qualifying Improvements
According to the IRS, improvements that add value to the home, prolong its useful life, or adapt it to new uses can qualify. This includes the following categories and home improvements:
• Home additions: Bedroom, bathroom, deck, garage, porch, or patio
• Home systems: HVAC systems, central humidifier, central vacuum, air/water filtration systems, wiring, security systems, law and sprinkler systems.
• Insulation: Attic, walls, floors, pipes, and ductwork
• Plumbing: Septic system, water heater, soft water system, filtration system
It’s also important to track any tax credits or subsidies received for energy-related home improvements, such as solar panels or a heat pump system, since these incentives must be subtracted from the cost basis.
Recommended: How to Find a Contractor for Home Renovations and Remodeling
Nonqualifying Expenses
Owning a home requires routine maintenance and occasional repairs — think fixing a leaky pipe or mowing the lawn. And the longer you own your home, the greater the chance you reapproach past home improvements with a fresh design or modern technologies. The IRS considers regular maintenance and any home improvement that’s been later replaced as nonqualifying costs.
For instance, a homeowner could have installed wall-to-wall carpet and later swapped it out for hardwood floors. In this case, the hardwood floors would qualify, but not the carpeting.
Recommended: The Costs of Owning a Home
How to Track Your Costs
Developing a system for tracking home improvement costs depends in part on where you are in the process. Here’s how to get track home improvement costs before, during, and after a renovation project.
Before You Renovate
The average cost to renovate a house can vary from $20,000 to $80,000 based on the size of the home and type of improvements. Given this range in cost expectations, it’s helpful to create an itemized budget that estimates the cost for each improvement. It’s hardly uncommon for renovations to take more time and money than expected, so consider budgeting an extra 10-20% for the unexpected.
Your itemized budget can be leveraged for tracking home improvement costs once the project starts. Simply plug in the completion date, cost, and description for each improvement, and keep receipts, to itemize the expense as it’s incurred.
Recommended: How to Make a Budget in 5 Steps
Keep Detailed Records
Tracking home improvement costs goes beyond crunching the numbers. The IRS requires documentation to adjust the cost basis on a property. As improvements are made, catalog contractor and store receipts and take pictures before and after the work is done to document the improvements for your records. Store these records digitally in a secure and accessible location; the IRS recommends keeping records for three years after the tax return for the year in which you sell your home.
Catch Up After the Fact
Tracking home improvement costs after the work has been completed is doable, but it requires more effort. If your renovations required any building permits, your municipality should have records on file.
For other projects, start by searching your email for receipts and records can help find a paper trail and track down documentation. Reach out to contractors you worked with for copies of missing receipts or invoices. If you paid with a check or credit card, you can browse through your previous statements or contact the bank for assistance.
Consult a Tax Pro
Taxes are complicated. If you have any doubts about what improvements qualify, consult a tax professional for assistance. Homeowners who used their property as a home office or rented it for any duration could especially benefit from a tax pro. Any property depreciation that was claimed in previous tax years may need to be recaptured if the home sale price exceeds the cost basis.
Home Improvement Financing Options
Renovations and upgrades to your home can be expensive. Many homeowners use a combination of savings and financing to pay for home improvements.
• HELOC: A Home Equity Line Of Credit lets homeowners tap into their existing equity to fund a variety of expenses, such as home improvements. With a HELOC, you can take out what you need as you need it, rather than the full amount you’re approved for, which is often 75%-85% of your home’s value. You only pay interest on the amount you draw.
• Cash-out refinance: Some owners take out a new home loan that allows them to pay off their old mortgage but also provides them with a lump sum of cash that they can use for home repairs (or other expenses). How much cash you might be able to take will depend on the amount of equity you have in your home.
• Personal loan: An unsecured personal loan could be a good option for quick funding that doesn’t require using your home as collateral. The interest rate and whether you qualify are largely based on your credit score.
• Credit card: Financing a home improvement with a credit card can help earn cash back or rewards on your investment. However, these perks should be weighed against the risk of higher interest rates. If using a 0% interest credit card, crunch the numbers to ensure you can pay off the balance before the introductory offer expires. 💡 Quick Tip: You can use money you get with a cash-out refi for any purpose, including home renovations, consolidating other high-interest debts, funding a child’s education, or buying another property.
The Takeaway
Tracking home improvement costs from the start can help stick to your project budget and lead to significant tax savings when it comes time to sell your property. A HELOC is one way to fund home improvements, and may be especially useful to borrowers who aren’t sure how much money they will need for home projects. If you’re unsure whether a home improvement qualifies under the IRS rules around capital gains tax on home sales, consult a tax professional.
SoFi now offers flexible HELOCs. Our HELOC options allow you to access up to 95% of your home’s value, or $500,000, at competitively low rates. And the application process is quick and convenient.
Unlock your home’s value with a home equity line of credit brokered by SoFi.
Photo credit: iStock/Cucurudza
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²
To obtain a home equity loan, SoFi Bank (NMLS #696891) may assist you obtaining a loan from Spring EQ (NMLS #1464945).
All loan terms, fees, and rates may vary based upon individual financial and personal circumstances and state.
You may discuss with your loan officer whether a SoFi Mortgage or a home equity loan from Spring EQ is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit brokered through SoFi. Terms and conditions will apply. Before you apply for a SoFi Mortgage, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and loan amount. Minimum loan amount is $75,000. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria.
SoFi Mortgages originated through SoFi Bank, N.A., NMLS #696891 (Member FDIC), (www.nmlsconsumeraccess.org). Equal Housing Lender. SoFi Bank, N.A. is currently NOT able to accept applications for refinance loans in NY.
In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
A credit privacy number (CPN) is formatted similarly to a Social Security number and is commonly used by fraudulent companies to scam people with bad credit. Using a CPN to apply for credit constitutes fraud, and they’re often tied to criminal activity.
A credit privacy number (CPN) is sold to consumers as a product to repair bad credit. In reality, these numbers can be associated with identity theft. The Federal Trade Commission (FTC) considers identity theft to be any instance where a criminal uses someone else’s personal information to “open accounts, file taxes or make purchases.” CPNs can pave the way for such fraudulent activity.
Here, we’ll explain what credit privacy numbers are, what they’re used for and how to avoid scams. Most importantly, you’ll also learn how to fix your credit without a CPN.
A credit privacy number, or CPN, is sold to consumers as a way to repair bad credit. But did you know these numbers can be associated with identity theft? Experian® reports that approximately one in every 20 Americans becomes a victim of identity theft each year, so it’s important to learn the dangers of CPNs if a company advertises one to you.
When you have bad credit, you may be more susceptible to methods that hurt your situation more than help it. Here, you’ll learn about what credit privacy numbers are, what they’re used for and how to avoid scams. Most importantly, you’ll also learn about how to repair your credit without a CPN.
Key takeaways:
Credit privacy numbers (CPNs) are often stolen Social Security numbers (SSNs).
Creating and even using a CPN can count as fraud.
No entities have the legal authority to issue CPNs despite their claims.
Table of contents:
What is a CPN?
A credit privacy number (CPN) is a nine-digit number set up in the same format as a Social Security number: XXX-XX-XXXX. CPNs aren’t issued by the federal government and have no official legal standing. They operate in a legal gray area, but using a CPN to apply for credit constitutes fraud, and they’re often tied to criminal activity.
You may also come across some other terms for CPNs, like:
Credit profile number
Secondary credit number
Credit protection number
What is a CPN used for?
Companies market and sell CPNs to supposedly fix bad credit, but using these products can have steep legal ramifications. CPNs are stolen Social Security numbers or products of synthetic identity fraud. It’s illegal to use a CPN to apply for credit, so even if you are “issued” one by a company, you can’t use it in any way that helps your credit.
A common scenario is criminals stealing Social Security numbers that belong to minors or those who are already deceased, since credit monitoring services usually don’t track their use. These stolen SSNs are then sold as CPNs, so all parties involved are participants in identity theft.
Synthetic identity fraud is another way criminals create CPNs to sell. This method involves using a computer algorithm to randomly create nine-digit numbers that match the formatting of Social Security numbers. Criminals then use an illegal online validator to ensure the fake number will pass as a legitimate SSN before selling it. One way they do this is by using potential SSNs that haven’t been issued to anyone yet.
How are CPNs different from SSNs, EINs and ITINs?
There are several types of numbers that can be used as identifiers for legal and financial purposes. Here’s a breakdown of the most common:
Social Security number (SSN): Issued by the federal government and is a unique identifier. Most U.S. citizens are issued one at birth, which they use to apply for a driver’s license, hold jobs, file taxes and apply for credit, among other things.
Employer identification number (EIN): A unique identifier for businesses and issued by the IRS. This allows business owners to open business bank accounts, get business licenses and file taxes under the business’s name.
Individual taxpayer identification number (ITIN): Similar to Social Security numbers, but the main difference is that ITINs are used by those classified as “authorized noncitizens.” For example, an immigrant working in the United States would need an ITIN to file and pay taxes.
The big difference between these numbers and a credit privacy number is that they’re legitimate numbers issued by actual entities within the federal government, and a CPN is not.
Is a CPN legal?
No, using a CPN is not legal. CPNs started as a byproduct of the Privacy Act of 1974. This act made it so that you couldn’t be forced to provide your Social Security number to a third party unless it was required by federal law, such as applying for a passport. This was meant to give Americans more privacy and protect them from identity theft.
Credit repair scams often market CPNs to those trying to rebuild their credit. But in fact, any business that sells a CPN is engaging in fraudulent activity.
What happens to those breaking the law with a CPN?
By purchasing a credit privacy number, you may unknowingly be breaking the law. According to the Federal Reserve Bank of St. Louis, CPN schemes often involve stolen CPNs from children, the elderly and incarcerated individuals. If an individual purchases a CPN, they may be convicted of various identity theft crimes, as well as the crime of making false statements on a loan or credit application.
The Department of Justice has been cracking down on identity theft, and they carry sentences of 15 to 30 years along with various fines for those who break these laws.
How to avoid a CPN scam
The best way to avoid a credit privacy number scam is to avoid anything involving a CPN. Be wary of a business that offers you a new credit identity—such as a CPN—it’s likely an identity fraud scam.
Other red flags include a company asking or suggesting that you lie about any identifying information, including your name, address or phone number, and a business asking for payment before completing any services.
Check out the Credit Repair Organizations Act to learn more about your credit repair rights.
How to report a CPN scam
The best way to eliminate criminals using fraudulent CPN scams is to report them whenever you see them, and you can do this through the Department of Justice. On their Fraud Section page, they have a variety of links and resources to report different scams.
Scams involving credit privacy numbers can also be reported to your local police department, your state’s attorney general and the Federal Trade Commission. While the investigation will be taking place at the state and federal level, reporting to your local police department can let them know what scams may be operating in the area so they can issue warnings to the community.
How to repair your credit without a CPN
Purchasing a CPN is tempting because it seems like a fast and easy way to repair your credit. In reality, building a good credit score takes time, but there are steps you can start taking today.
Dispute errors on your credit report: Derogatory marks include collections, late or missed payments, bankruptcies and other negative marks. These heavily weigh down your credit, so clean your credit report often.
Use a pay-for-delete letter: You may have heard that paying off collections usually won’t improve your credit. If you negotiate a pay-for-delete agreement with the collection agency, they may remove the collection account from your report, which would likely help your credit.
Become an authorized user: If you have bad credit, try to become an authorized user on a friend or family member’s credit card account to “piggyback” off their credit.
Find a cosigner: Making payments on loans—like auto or personal loans—can improve your credit. If you can’t get approved for a loan, finding a cosigner may help.
Don’t miss a payment: One of the best things you can do is ensure you don’t miss any payments that get reported to credit bureaus. Maintaining a good credit history will help you repair and improve your credit.
Repair your credit with Lexington Law Firm
Although there are credit repair scams, legitimate credit repair companies can help you rebuild your credit. Lexington Law Firm has a team of legal professionals who have experience with credit recovery.
They can review your credit report, find errors that may be hurting your credit and challenge them on your behalf. Our services also include tools such as a credit snapshot, which can help you maintain good credit and improve your financial future.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Vince R. Mayr
Supervising Attorney of Bankruptcies
Vince has considerable expertise in the field of bankruptcy law.
He has represented clients in more than 3,000 bankruptcy matters under chapters 7, 11, 12, and 13 of the U.S. Bankruptcy Code. Vince earned his Bachelor of Science Degree in Government from the University of Maryland. His Masters of Public Administration degree was earned from Golden Gate University School of Public Administration. His Juris Doctor was earned at Golden Gate University School of Law, San Francisco, California. Vince is licensed to practice law in Arizona, Nevada, and Colorado. He is located in the Phoenix office.
USDA mortgages are aimed at borrowers buying in eligible rural areas.
These loans come with lenient rules around credit scores and down payment requirements.
USDA loans come with income limits that vary by location.
USDA loans are one of many options available to finance a home purchase. However, their attributes and eligibility requirements make them unique from other types of home loans. Still, if a USDA home loan is an option for you, there are some big perks you might want to take advantage of.
What is a USDA loan?
A USDA home loan is a no-down payment mortgage for low- and moderate-income homebuyers in largely rural areas. USDA loans are part of a national program created by the U.S. Department of Agriculture to help create loans for first-time homebuyers or people who don’t meet conventional mortgage requirements. They are sometimes referred to as rural development or RD loans.
Along with no need for a down payment, USDA loans have another advantage: You could qualify for a low, fixed interest rate if you have low income.
Some drawbacks, though, are that the property must be located in a USDA-approved area, and borrowers cannot exceed income limits.
Who is eligible for a USDA loan?
USDA eligibility requirements include:
The borrower must be a U.S. citizen or permanent resident with a track record of stable income.
The home must be in a rural area designated by the USDA.
The borrower’s household income must be limited to 115 percent of the median income in the county where the property is located.
While USDA loans have no formal minimum credit score, a borrower must have a credit history that demonstrates they can pay back debt. To qualify for streamlined processing, the minimum score is 640. The USDA uses alternative methods to evaluate borrowers without credit scores.
Eligible properties
The easiest way to find out if a home is in a USDA-eligible area is to check the USDA website. Homes purchased with USDA loans must be located in eligible rural areas. The USDA defines these areas as “open country or any town, village, city, or place, including the immediately adjacent densely settled area, which is not part of or associated with an urban area.”
USDA mortgages are only available in these rural areas as part of a government initiative to promote homeownership and economic growth. These loans can help attract and retain people in these locations.
Income limits
The USDA guaranteed loan program is geared toward low- and moderate-income homebuyers. For this reason, applicants can’t earn more than certain income limits, which vary by metro area and family size. In more expensive areas, the income ceiling is higher. You can check income limits for your county and household size using the same property eligibility tool on the USDA website.
To prove income, you’ll need to provide the lender with documentation such as:
Paystubs
Tax statements (W-2s, 1040s and 1099s)
Alimony and child support payments
Social Security payments
Statements for bank and investment accounts
Credit score
The USDA doesn’t impose a blanket credit score requirement for all borrowers, but typically, USDA-approved lenders look for a score of at least 640.
Types of USDA loans
Different types of USDA loans cater to different buyers, each coming with its own requirements and reasons for use. Let’s break them down.
USDA guaranteed loans
The USDA guaranteed home loan program (officially known as Section 502 Guaranteed) allows approved mortgage lenders to provide 30-year fixed-rate loans to borrowers in USDA-eligible locations. It’s called a “guaranteed loan” because the USDA guarantees 90 percent of the loan to lenders in the event you were to default on the mortgage.
Along with buying a home in a USDA-approved area, you’ll also need to meet an income requirement: no more than 115 percent of your area’s median household income (AMI). You can find income limits for your market using this tool.
USDA direct loans
Also known as Section 502 Direct, USDA direct loans offer low-rate home loans to individuals in rural areas in need of adequate housing. Unlike USDA guaranteed loans, you’ll apply for a direct loan through the USDA’s Rural Development Service Centers.
Direct loans are only available to households with low and very low income. (You can view income limits here). There’s also a limit on how much you can borrow, depending on the county where the home is located. (You can view area loan limits here.)
Direct loans have a fixed interest rate, which can be reduced to 1 percent if you qualify for payment assistance. The loan terms range up to 33 years, or 38 years for very low income borrowers.
USDA repair loans and grants
The USDA repair loan program (Section 504 Home Repair) is similar to the direct program in that it caters to low-income individuals. But it’s different in that it provides loans only up to $40,000 and only to help improve or repair a home. It also offers grants to very low-income homeowners aged 62 or older to help remove hazards at home. These are capped at $10,000.
Pros and cons of USDA loans
The major benefit of a USDA home loan is that there’s no down payment requirement. This can be a great program for homebuyers on a budget who are flexible about where they live. The cons mostly have to do with the restrictions on where you can buy or how much income your family can make.
Pros
No down payment required
No formal loan limit for guaranteed loans
Seller can pay the closing costs
Available for both purchasing property and refinancing
Low, fixed interest rates for direct loans
Cons
Strict guidelines around where the property is located
Must use the home for a primary residence
Limited income requirements
Upfront and annual fees
How to apply for a USDA loan
To apply for a USDA loan, you’ll first need to determine if you qualify. Consult the USDA property and income eligibility maps. If you meet those parameters, next consider whether you’ll want or need a guaranteed or direct loan. Remember: Guaranteed loans have higher income limits, and you’ll apply for one through a USDA-approved lender. Direct loans, on the other hand, are reserved for lower-income borrowers who lack access to safe housing.
When you’re ready to apply, you’ll submit paperwork about your finances, including income, assets and debt, and undergo a credit check. If preapproved, you can begin searching for a home in an appropriate area based on USDA eligibility.
USDA loan fees
USDA mortgages come with two fees:
Upfront guarantee fee: The upfront guarantee fee this fiscal year is 1 percent of the loan amount. For example, for a $100,000 loan, this fee would be $1,000. This fee can often be rolled into the mortgage instead of paying it out of pocket.
Annual fee: The annual fee is 0.35 percent of the loan amount. A $100,000 mortgage, for example, would have a $1,000 one-time payment (the upfront guarantee fee) and a $350 per year ongoing payment for the life of the loan.
Both of these fees are charged to the lender, who then usually passes the cost on to the borrower. These fees keep USDA loans subsidy-neutral, which means that any losses incurred by the program are paid for by these fees instead of taxpayer dollars. Depending on the needs of the program, the fees can change annually.
How much does it cost to get a USDA loan?
Along with the two USDA fees listed above, you’ll need to cover regular mortgage costs. These may include:
Origination fee: Many lenders charge an origination fee on mortgages, regardless of loan type. The fee usually costs around 1 percent of the amount you’re borrowing.
Loan application fee: Similar to applying for college, some lenders charge a nominal fee to complete the mortgage application.
Title insurance and services: When you buy a home with a mortgage, you’ll need to pay for a title search and lender’s title insurance policy. The cost varies depending on the closing attorney or settlement or title company you work with.
Processing or underwriting fees: In addition to (or sometimes in lieu of) an origination fee, some lenders charge a “processing” or “underwriting” fee. This cost covers the expense of underwriting your loan application.
Credit report fee: Many lenders charge a small fee to run a credit check.
Appraisal: As the homebuyer, you’ll be responsible for paying for the home appraisal before the lender can approve your loan. A home appraisal cost a median of $500 in 2022, according to the National Association of Realtors.
Discount points: Many lenders offer the option to purchase mortgage points to buy down your loan’s interest rate. One point costs 1 percent of the amount you’re borrowing.
How do USDA loans compare to other types of loans?
USDA loans aren’t the only type of mortgage out there. If you’re not eligible for a USDA loan, you might be for an FHA or VA loan, or even a conventional loan. Here’s an overview of some key differences between these types of loans:
USDA loan
Conventional loan
FHA loan
VA loan
Credit requirements
None, but 640 is standard
620
580
None unless lender requires
Debt-to-income (DTI) ratio requirements
Up to 41%
Up to 43%
Up to 50%
Up to 41%
Down payment requirements
None
3% or 5%
3.5%
None
USDA loan FAQ
USDA loans do not require PMI, as PMI is only for borrowers of conventional loans who put down less than 20 percent. Instead of charging mortgage insurance, USDA loans charge two fees: the upfront guarantee fee (which equals 1 percent of the loan amount) and an annual fee (which equals 0.35 percent of the loan amount, charged yearly).
You can refinance an existing USDA mortgage into another USDA mortgage or refinance an existing USDA mortgage into a conventional mortgage. However, you cannot refinance a non-USDA mortgage into a USDA mortgage. If you have a USDA loan, you have three options for refinance: a USDA streamline, USDA non-streamline or conventional loan refinance
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
The United States Department of Veterans Affairs doesn’t have a minimum credit requirement for loans. However, private lenders are usually more favorable to applicants with a credit score of at least 500.
The United States Department of Veterans Affairs (or VA for short) doesn’t have set credit requirements for loans. Yet, “What is the minimum credit score for a VA loan?” remains a common question. This is because there are private lenders who also offer VA loans—and who typically have specific credit requirements for borrowers.
Most private lenders are willing to work with applicants who have at least a 500 credit score. The higher your score, the more likely you are to obtain a loan. Here, we’ll discuss the nuances of credit scores and the military‘s requirements for VA loans. We’ll also share how Lexington Law Firm can assist you on your credit-building journey.
Key takeaways:
The VA has a special debt relief program for veterans.
Veterans can qualify for unique loans.
The Servicemembers Civil Relief Act only applies to active-duty members.
The minimum credit score for a VA loan
The VA doesn’t require a minimum credit score for loans. Private lenders, however, will use your credit score to gauge your eligibility and set your interest rate. Applicants with higher credit scores tend to receive better rates, and private lenders tend to look favorably on applicants with good credit scores (670 – 739, according to the FICO® model).
That said, it’s still possible to get a loan with bad credit. Applicants with low credit scores can make a higher down payment if they have the capital to do so. Applying with a cosigner is also another valid alternative; lenders will look at the creditworthiness of both signees when deciding whether or not to approve you.
What are the VA loan eligibility requirements?
VA loans have unique qualifiers besides credit scores that applicants will need to keep in mind. Since the Department of Veterans Affairs primarily works with service members who’ve already retired, many active-duty service members may not be eligible for VA loans.
Below, we’ll break down the eligibility criteria for VA loans by category.
Credit and income Information
We know the VA doesn’t have strict limits on credit, but they do require proof of income. Applicants will also have much better odds if their debt-to-income ratio is below the 44 percent threshold.
Discharge status
So long as an applicant wasn’t dishonorably discharged from service, they are eligible for a loan. Unless a service member was deemed insane when they were charged, title 38 of the United States Code (38 U.S.C. § 5303) states that individuals are susceptible to a statutory bar to benefits if they were released or discharged for any of the following reasons:
Was sentenced to a general court-martial
Was a conscientious objector and refused to comply with lawful orders of competent military command
Deserted their post
Resignation by an officer for the good of the service
Being absent without official leave (AWOL) for a consistent period of 180 days or more
Requested release from service as an alien during a period of hostilities
Certificate of eligibility
You’ll need a certificate of eligibility (COE) to apply for a VA home loan. Once you gain a copy of your discharge/separation papers, you can request your COE by mail, phone, through a lender or via the VA’s online portal.
Military service status
The requirements for this category will vary depending on your relationship with the military.
Active-duty service members: Must have 90 consecutive days of service.
Veterans: Must have 90 days of service during wartime or 181 days of service during peacetime.
National Guard or Reservists: Are required to have 90 days of active duty service or six completed years of service.
Spouses: Spouses of deceased or disabled service members.
Occupancy requirements
The VA has specific occupancy requirements to deter people from misusing their loans. VA loans are intended for primary residences, not investment properties or vacation homes. To that end, applicants can only secure VA for their primary residence and will need to submit proof of homeownership in most instances.
Applicants will also have 60 days after closing on a property to move in and occupy it as their primary residence. In certain circumstances (such as if an applicant is on active duty), this 60-day window will be extended.
What are the benefits of using a VA loan?
VA loans provide a host of advantages to anyone who can secure them. Several examples include:
No down payment: If you can secure a VA loan for your home, you won’t be required to offer a down payment. Applicants who want to lower their interest rate will still have the option to place a down payment.
Low-interest rates: Because VA loans are backed by the government, they traditionally come with some of the lowest interest rates available.
PMI isn’t required: Once again, thanks to government backing, VA loans let applicants save money by forgoing private mortgage insurance (PMI).
3 simple ways to improve your credit
We’ve established that private lenders prefer applicants with good credit. FICO, one of the most respected credit reporting companies in the world, defines good credit scores as any that fall between 670 and 739.
If your score isn’t already in that range, here are a few strategies to help you along the way.
Regularly make your payments on time
FICO considers payment history to be the most important factor when determining what affects your credit score. VantageScore®, a credit reporting company founded by Equifax®, Experian® and TransUnion®, also holds payment history in high regard.
Missing a payment can drastically hurt your credit. On the other hand, consistently making payments on time, even if it’s just the minimum payment, will steadily yield positive results.
Maintain a low credit utilization rate
Credit utilization looks at your credit borrowing trends—your current balances compared with your total credit limit determines your credit utilization rate for a given period. FICO and VantageScore urge borrowers to keep their utilization rates below 10 percent, though 30 percent and below is the next best option.
Dispute errors on your credit report
Errors can appear on your credit report that can dramatically lower your credit. It’s possible to challenge these errors and potentially have them removed, though many people may need help handling credit disputes.
Lexington Law Firm works to help people address these errors on their reports. Plus, we can also contact the major credit reporting bureaus on your behalf.
Monitor your credit with Lexington Law Firm
Low credit scores may make it harder to secure a VA loan. However, it’s never too late to improve your credit and bolster your eligibility. Lexington Law Firm offers unique credit repair services for veterans and service members whose credit may have altered during their time in the military.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Alexis Peacock
Supervising Attorney
Alexis Peacock was born in Santa Cruz, California and raised in Scottsdale, Arizona.
In 2013, she earned her Bachelor of Science in Criminal Justice and Criminology, graduating cum laude from Arizona State University. Ms. Peacock received her Juris Doctor from Arizona Summit Law School and graduated in 2016. Prior to joining Lexington Law Firm, Ms. Peacock worked in Criminal Defense as both a paralegal and practicing attorney. Ms. Peacock represented clients in criminal matters varying from minor traffic infractions to serious felony cases. Alexis is licensed to practice law in Arizona. She is located in the Phoenix office.
Read more: US home sales – what’s the latest? This trend could prove frustrating for homebuyers seeking more choices in a tight market. Since older homeowners make up a substantial portion of the homeowner population, their decision to age in place limits the number of houses coming on the market, potentially further fueling competition and … [Read more…]
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Credit card companies report payments at the end of their monthly billing cycle, also known as the statement closing date.
Credit cards are great for making large purchases and racking up points or miles and useful for building and improving your credit. If you’re a credit card holder constantly tracking your credit score to see improvement, it can be helpful to know when companies report to credit bureaus.
Unfortunately, issuers don’t report to credit reporting agencies on a specific day of the month. However, we can investigate a few factors to provide a prediction of when they will report as well as when you will see your payments reflected on your credit report.
Table of contents:
When do credit card companies report to credit bureaus?
How does credit card utilization affect your credit score?
How to decrease your credit utilization risk
How often do credit reports and scores update?
When do credit card companies report to credit bureaus?
Unfortunately, there isn’t a set date for when credit card companies report to the three credit bureaus: TransUnion®, Experian® and Equifax®. However, you can estimate the time frame by considering a few factors. Credit card companies typically report payments at the end of the monthly billing cycle. This is also known as your statement closing date. You can find these dates on your monthly statement.
However, don’t expect your credit report to update on the same day. It usually takes a bit for credit reporting agencies to update the information on your credit report. Updates on your credit report will also depend on:
The number of lines of credit
Due dates for every line of credit
If the credit issuer reports to all three credit bureaus or just one or two
The frequency and speed with which the credit bureau updates reports
If you’ve just paid your statement balance or previously unpaid balances, you likely want to see that reflected on your credit report as soon as possible. Since we don’t have a set-in-stone date for when you’ll see updates on your credit report, we recommend waiting at least a month or so to see any changes. If several months pass and you don’t see any updates to your report, we recommend contacting your credit card company to confirm your payments were correctly processed.
How does credit card utilization affect your credit score?
Credit utilization is the ratio of your current outstanding credit debt to how much total available credit you have. Available credit is the maximum amount of money you can charge to your credit card. A low credit utilization is a good sign that you, the borrower, are using a small amount of your credit limit.
A large outstanding credit balance—or higher credit utilization—can negatively affect your credit. This is especially true if the credit utilization percentage is higher than 30 percent. The lower your credit utilization, the better your credit may be.
How to decrease your credit utilization
Your credit score is affected by five factors: credit utilization, credit mix, new credit, payment history and length of credit history. However, credit utilization makes up 30 percent of your score. If you’re worried about how your credit utilization impacts your credit score, there are ways to decrease your risk and potentially improve your credit.
1. Complete multiple payments
Completing smaller payments every month can help lower your credit balance. You can also set up automatic payments so your credit balance is as low as possible when your credit card company reports to the credit bureaus.
2. Ask for a higher credit limit
Increasing your credit limit can lower your credit utilization ratio, as you’ll have more credit available. This can improve your credit score as it reduces the percentage of credit used every month. However, a higher credit limit may encourage you to spend more, which could go against your goal to improve your credit. Only ask for a higher credit limit if you think you’ll stay within your current average spending amount.
3. Complete payments on time
Paying your bills by their due date is the easiest way to improve your credit. This can become harder if you have multiple credit accounts, as they won’t always have the same due dates. Keeping track of your due dates (found on the monthly statements) via credit card management apps or similar tools can help you stay on top of your bills.
If you can do so, making multiple payments on your card(s) throughout the month is the smartest move. This is because it can increase the likelihood that your credit utilization ratio is low when your credit card provider reports your data to the credit bureaus.
How often do credit reports and scores update?
While there isn’t an exact date when your credit score and report will update, it usually occurs within a 30- to 45-day timeframe. This also depends on when the credit bureaus refresh the information in your report. Remember that if you have multiple lines of credit, you’ll see your credit score constantly fluctuating based on when your creditors report to the credit reporting agencies.
How long until a new card appears on your credit report?
Just received and activated a new credit card? You’ll need to wait a bit to see your new credit card appear on your credit report. You can expect it to show up 30 to 60 days after your application was approved and your creditor opened the account. The number of days will depend on your credit card’s billing cycle.
Assess your credit with Lexington Law
Now that you have a better understanding of when companies report to credit bureaus, it’s also a good time to assess your credit score. If you receive your credit report and notice your credit score isn’t as good as it should be, don’t worry. With help from professional credit repair consultants at Lexington Law Firm, you may be able to improve your credit through our credit repair process. Get started with a free credit assessment today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Nature Lewis
Associate Attorney
Before joining Lexington Law as an Associate Attorney, Nature Lewis managed a successful practice representing tenants in Maricopa County.
Through her representation of tenants, Nature gained experience in Federal law, Family law, Probate, Consumer protection and Civil law. She received numerous accolades for her dedication to Tenant Protection in Arizona, including, John P. Frank Advocate for Justice Award in 2016, Top 50 Pro Bono Attorney of 2015, New Tenant Attorney of the Year in 2015 and Maricopa County Attorney of the Month in March 2015. Nature continued her dedication to pro bono work while volunteering at Community Legal Services’ Volunteer Lawyer’s Program and assisting victims of Domestic Violence at the local shelter. Nature is passionate about providing free knowledge to the underserved community and continues to hold free seminars about tenant rights and plans to incorporate consumer rights in her free seminars. Nature is a wife and mother of 5 children. She and her husband have been married for 24 years and enjoy traveling internationally, watching movies and promoting their indie published comic books!
FHA 203(k) loans provide funding to finance both a home’s purchase and the cost of repairing it. If you qualify, you can obtain one from an FHA-approved lender.
This type of loan is reserved for borrowers who intend to live in the home, not house-flippers or investors.
There are two types of 203(k) rehab loans: limited, for repairs less than $35,000, and standard, for more expensive projects.
When you buy a home, there are usually a few repairs to pay for. If you plan to take on a fixer-upper, you might be facing the prospect of many projects. If this is the case for you, you might be considering an FHA 203(k) loan.
What is an FHA 203(k) loan?
An FHA 203(k) loan, also known as an FHA 203(k) rehab loan or Section 203(k) loan, combines the financing for a home’s purchase and remodeling or repairs into a single loan. Along with these costs, you can also use a 203(k) loan to finance up to six months’ of mortgage payments while you live elsewhere during renovations.Like other FHA loans, a 203(K) loan is insured by the Federal Housing Administration and offered by FHA-approved mortgage lenders. It also comes with the requirement to pay FHA mortgage insurance.Types of 203(k) rehab loans
There are two types of FHA 203(k) loans: limited 203(k) and the more popular standard 203(k). Here’s an overview:
Key terms
Limited 203(k) loan:
Designed for non-structural projects valued at less than $35,000, with no minimum cost requirement
Standard 203(k) loan:
Designed for more extensive jobs, including major structural work like an addition, with a minimum cost requirement of $5,000
How does an FHA 203(k) loan work?
A 203(k) renovation loan can be a 15- or 30-year fixed-rate or adjustable-rate mortgage (ARM). The amount you can borrow depends on criteria such as your credit rating and income. The total amount borrowed through 203(k) loans must be within FHA loan limits for the area in which the home is located.
Generally, the most you can borrow for the loan is the lowest of the following:
The FHA’s maximum loan limit for the county where the property is located
The home’s before-renovation value plus improvement costs
The home’s after-renovation value
What can an FHA 203(k) loan be used for?
A standard 203(k) loan can cover many major projects, including:
Converting a property from one unit to up to four units, or the reverse
Foundation repairs
Adding or repairing a deck, patio or porch
Adding or remodeling a garage
Adding or repairing septic or well systems
Adding a fence
Adding accessibility features for those living with disabilities
Installing appliances
Landscaping
Remediating health and safety hazards, such as lead paint
This type of loan can’t cover improvements such as adding a gazebo, swimming pool or tennis court. It also can’t be used for repairs to co-ops or mixed-use properties, unless that property is primarily residential.
A limited 203(k) loan, in contrast, can cover upgrades like new carpeting or paint.
FHA 203(k) loan requirements
There are many requirements to qualify for an FHA renovation loan, including:
Occupation – The main restriction for an FHA 203(k) loan is that the borrower has to be the owner-occupant of the home. Investors are not eligible for this kind of loan, although in certain situations, nonprofit organizations might be allowed to obtain one.
Credit score and down payment – You’ll need a minimum credit score of 580 with 3.5 percent down, or a minimum score of 500 with a down payment of 10 percent.
Debt-to-income (RTI) ratio – Your debt-to-income (DTI) ratio, which measures your gross monthly income against your monthly debt payments, can’t exceed 43 percent.
Renovation rules – You can only use a limited 203(k) loan for non-structural renovations costing less than $35,000. For a standard 203(k) loan, the work has to involve major construction and cost at least $5,000.
Timeline – Generally, the work has to be completed within six months of closing.
How to get an FHA 203(k) loan
Once you’ve identified a home to buy and fix up, you can apply for a 203(k) loan with your lender. If you’re obtaining the standard version of the loan, the lender will assign a 203(k) consultant to your project. The consultant will visit the home to estimate repair costs. If you’re getting the limited 203(k), you’re not required to work with a consultant.
Once your lender signs off on these details and closes the loan, you’ll work with a licensed contractor to handle renovations. Ideally, this contractor should be familiar with 203(k) loans, especially the payment schedule and requirements. If you’re qualified, you might be able to do some or all of the work yourself, but you can’t use the loan proceeds for your labor cost.
The process from there works like a regular construction loan: The lender issues payments to the borrower at various phases of the renovation. As the project progresses, the consultant will inspect the work to authorize more payments. You’ll have six months to complete the renovations. Once the project is finished, you’ll provide a release letter and the consultant will evaluate the work.
FHA 203(k) loan pros and cons
An FHA 203(k) loan offers the opportunity to purchase a home that needs some work without having to obtain two loans. However, there are many rules to qualifying for this type of mortgage.
Pros of an FHA 203(k) loan
One loan for both purchase and renovations
Lower credit score requirement
Low minimum down payment requirement
Potentially lower interest rates compared to credit cards or home improvement loans
Can finance up to six months of mortgage payments if living elsewhere during renovations
Cons of an FHA 203(k) loan
Must plan to live in the home during or after renovation, for at least one year
FHA mortgage insurance payments required
Rates might be higher compared to buy-and-renovate conventional loans
Work must be completed in six months, in most cases
FHA 203(k) loan refinancing
You can use FHA 203(k) loans to purchase a fixer-upper or rehabilitate the home you already live in through a refinance. The process to refinance into a 203(k) loan is similar to a regular refinance, but you must meet the additional requirements of the 203(k) loan.
After refinancing, a portion of the 203(k) proceeds will pay off your existing mortgage, and the rest of the money will be kept in escrow until repairs are completed.You can also refinance an existing 203(k) mortgage through the FHA streamline program, which may help you get an even lower interest rate.
FHA 203(k) loan FAQ
An FHA 203(k) loan funds the purchase of a home and qualifying renovations, while a short-term construction loan funds renovations only. Once the project is complete, you can convert the construction loan to a regular mortgage. Depending on your credit and finances, a 203(k) loan might be easier to qualify for, but a construction loan has less restrictions around the types of improvements you can finance.
An FHA 203(k) loan can be used for single-family homes (including homes with accessory dwelling units, or ADUs), duplexes, triplexes or another multifamily home up to four units. It can also be used for an eligible condo or manufactured home, or a townhome. You might be able to use it for a mixed-use property, as well, provided the property is majority-residential.
If you’re qualified — say, a licensed general contractor — you might be able to do some or all of the work yourself. You cannot reimburse yourself for labor costs with the 203(k) loan proceeds, however.
An FHA 203(k) loan allows you to use funds for everything from minor repair needs to nearly the entire reconstruction of a home, as long as the original foundation is intact.
FHA 203(k) loans are one of several options to pay for home improvements. These alternatives include a conventional HomeStyle or CHOICERenovation loan; a cash-out refinance; a home equity line of credit (HELOC) or home equity loan; credit cards; or personal loans. You might also explore co-investment or shared equity companies, which provide financing in exchange for a piece of your home’s appreciation when you sell.