What Is Considered a USDA High Cost County?

Are There Benefits to Buying a Home in a USDA High Cost County? 

USDA income limits for the Guaranteed Program are both generous and based on household income size, but many are not familiar with the eligibility advantages for what is considered a high-cost county.

USDA High Cost Counties

While many make the assumption that the USDA loan program is strictly for smaller loan amounts, this is simply not true. Unlike FHA loans, for example, the USDA loan program does not have a set loan limit. The maximum loan size is based on the applicant’s ability to repay.

The USDA Guaranteed Rural Housing (GRH) Program breaks down income limits for tiers of 1-4 person households and 5-8 person households. Income calculations vary from state to state and from county to county.

High cost counties are considered part of a Metropolitan Statistical Area (MSA), so the income limits are increased to allow for the higher cost of living.  The United States Office of Management and Budget  defines an MSA to “have at least one urbanized area of 50,000 or more population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties.”

For today’s comparison, we’ll use the Florida counties of Highlands and Collier.

USDA income limits for Highlands County start at $74,750 for a household size of 1-4 and increase to $98,650 for households consisting of 5-8 members. In comparison, Collier County has income limits of $83,750 and $110,550 respectively.

Please note that household income eligibility is based on total income by all household members, NOT just those who are on the loan application.