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Part 1 – USDA Property Eligibility: What are USDA Mortgage Loan Requirements?

January 12th, 2024 by Sean Stephens

In Part 1 of our USDA Property Eligibility series, we will discuss general USDA Property Eligibility guidelines and how that applies to USDA mortgage loan requirements in Florida, Texas, Tennessee, and Alabama.Florida USDA Property Eligibility

When you hear about USDA loan benefits, such as 100% financing or the ability to finance closing costs, it can be easy to focus on the financial advantages and then forget about USDA property eligibility.

USDA loans allow for no down payment flexibility and provide financing fuel for rural communities throughout the nation as long as they follow specific property requirements. Today, we’ll take a deep dive into USDA eligibility and what makes a property suitable.

You can also download our FREE USDA Blueprint for Success. This free guide is designed to walk you through the USDA qualification process and is a great resource for the real estate community!

1. USDA Eligible Area

First, the property must be located in a USDA eligible area which is found through the USDA eligible area search tool.Sebring Florida Highlands County USDA Property Eligibility

Please note, eligibility areas are subject to change based on population data taken from both the U.S. Census and the American Community Survey. For example, USDA eligibility maps were just updated in 2023 and the most recent change prior to that occurred in 2018. It is important to not assume a property is USDA eligible, but to instead double check the USDA eligibility map to be certain.

Remember, if it is not the property is not located in an eligible USDA area, then it will not be eligible for USDA financing.

However, for those homeowners looking to lower their interest rate and save money on a USDA Streamlined-Assist Refinance or other USDA refinance programs, there is an exception for properties that were located in an eligible are at time of purchase but have since changed to an ineligible area over the years. Provided the property still maintains a USDA loan, the property would remain eligible for one of these special USDA refinance programs. Please call, text, or email with any USDA refinance or USDA eligible area questions in Florida, Texas, Tennessee, or Alabama.

2. USDA Property Eligibility Reminder

Remember, USDA loans do NOT have set loan limits like FHA or Conventional loans. Also, there is no maximum sales price which opensUSDA condo eligibility up a wider range of property types that can be searched for within USDA eligible areas. These property types can include:

  • Pre-existing homes
  • Short sales and foreclosed homes
  • Condos
    • A condominium may be eligible pending the project itself can be approved or already has an existing type of approval from another agency such as FHA, VA, Fannie Mae, or Freddie Mac.
  • New Construction
    • For a home that is to be constructed, is under construction, or an existing dwelling that is less than one year old and has never been occupied.

3. What Properties are Not Eligible for a USDA Loan

  • Existing Manufactured Homes (Unless currently eligible through the USDA Existing Manufactured Home Pilot Program)
  • Investment Properties or Second Homes (USDA Loans only permit Primary Residences)
  • Properties that include buildings which are designed to be used principally for income-producing purposes such as those which contain barns, silos, or other type of commercial operation.

4. USDA Property Eligibility Reminder

It’s also important to note, that a USDA loan requires the home to serve as the primary residence and not be income-producing. However, this does NOT exclude properties with acreage or barns as long as they are no longer in commercial use.

USDA Approved Lender – Metroplex Mortgage Services

As you can see, the USDA loan program has a wide variety of property types and can be extremely powerful. As a approved USDA lender, we have a proven track record of success under this unique program and are here to let our resources go to work for you!

Simply just call, text, or email to discuss your scenario and let us show you the “Metroplex” difference!

(800)806-9836 Ext. 280
Call/Text: 863-593-2001
SeanS@MPLX.org

Let’s make it a great day, and I’ll see you here for the next tip of the week!

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