What is the primary purpose of calculating qualifying income in the USDA Rural Housing Loan program?

The primary purpose of calculating qualifying income in the USDA Rural Housing Loan program is to assess the eligibility of the household for the loan. This is crucial because the program is designed to assist low- to moderate-income individuals and families in obtaining home financing in rural areas. By determining qualifying income, the USDA can ensure that the applicants meet the income limits set for the program, which helps to prioritize assistance for those who truly need it.

Assessing income is essential in evaluating whether applicants can afford the loan and are suitable candidates based on the program’s objectives. In addition, this income calculation plays a vital role in establishing the household's ability to repay the mortgage, thereby minimizing the risk for taxpayers who fund these loan programs. While aspects like monthly mortgage payments and credit scores are important in the overall loan application process, they do not directly relate to the main purpose of determining whether a household qualifies for the USDA loan based on income levels.