Is there an acreage limit on USDA Rural Home Loans?
Do USDA Loans have acreage limits?
Acreage questions and USDA loans seem to go hand in hand. This also happens to be one of the most common questions that we receive. In today’s video I will explain the details and help separate fact from fiction.
Also, if you have not yet done so, feel free to download our newest “USDA Blueprint” with the link below. This free guide is designed to help walk you through the USDA process step-by-step and is a great educational resource for both homebuyers and Realtors alike.
Do USDA Loans have an acreage limit?
As a starting point, remember the title of the program is the USDA Single Family Housing Guaranteed Loan Program and because this is for single family housing, it is not designed to be a loan solution for working farms or income producing properties.
Now, to answer our question, USDA Rural Home Loans do NOT have an acreage limit!
This is a great improvement when compared to previous USDA guidelines which had such limitations! With this added flexibility, it now provides the potential to increase both the amount of acreage you can finance with a USDA loan along with available property types.
However, when working with higher acreage properties please keep in mind the following USDA requirements:
- The site must be typical for the area;
- The site must not include income-producing land or buildings to be used principally for income-producing purposes;
- Vacant land without eligible residential improvements; or
- Property used primarily for agriculture, farming or commercial enterprise.
It is also important to remember that when determining their market value, appraisers will look to compare other similar sized acreage properties that have recently closed.
While it is true that you will not be able to purchase a stand-along parcel of vacant land, remember that you are able to purchase land in conjunction with a single-family, manufactured, or modular home under the USDA Single-Close Construction to Permanent Loan.
In fact, we have recently seen an increase in USDA Manufactured Home and Land financing package requests.
Remember, that while manufactured homes are not generally not permitted, USDA loans can be used for new manufactured homes under the Single-Close Construction to Permanent Feature. This is a case where funds from the USDA loan may be used to purchase an eligible parcel of land in conjunction with the home purchase.
We have experience working with USDA Loans for Manufactured Homes so please contact my team today so we can walk you through the qualifying steps.
Unique properties can require additional review upfront, so if you have any USDA loan acreage questions, contact my team so we can start to review and help determine how many acres you can buy with a USDA loan.
In summary, do not assume that a property may or may not be eligible for a USDA just based on its acreage. Comparable sales in the area will help to justify if the site value is typical for the area.
I founded Metroplex Mortgage Services way back in 2001 and in addition to being ranked among the top USDA Approved Lenders, my team is known for our overall government loan expertise and helping walk homebuyers through the mortgage qualifying maze.
If you need help, that is what we are here for, just call or email to discuss your scenario and let us show you the “Metroplex” difference.
(800)806-9836 Ext. 280
As always, I want everyone to make it a great day and I look forward to seeing you right here for the next tip of the week!
Don’t forget to download our USDA blueprint for success with this link below: