USDA Property Eligibility: What property types are eligible for a USDA loan?
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 guide walks you through the entire USDA process, step by step!
USDA Eligible Property
1. Qualified Area
First, the property must be located in a USDA eligible area. You can search that it is using this USDA search tool.
Please note, eligibility areas can change annually. Thus, it’s important to use the most up-to-date USDA search to determine if the home is in a USDA area.
2. Eligible Property Types
Remember, USDA loans do NOT have set loan limits like FHA or Conventional loans. Thus, there is no maximum sales price. This opens up a wider range of properties provided they’re in a USDA eligible area. These property types can include:
- Pre-existing homes
- Including those with inground swimming pools.
- Short sales and foreclosed homes
- 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. Property Use
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
As you can see, the USDA loan program has a wide variety of property types and can be extremely powerful. As an approved USDA lender, we have a proven track record of success under this unique program and are happy to help!
Simply call or email to discuss your scenario and let us show you the “Metroplex” difference!
(800)806-9836 Ext. 280
Let’s make it a great day, and I’ll see you here for the next tip of the week!