A USDA ‘Rural Development’ loan is a zero-down home loan meant for low-to-moderate-income home buyers. As with any state or government program, certain eligibility requirements must be met in order to qualify.
To start, eligible applicants must be a U.S. citizen or have permanent residency. Income limits are set based on both the household size and the county in which you plan on living. You cannot exceed these income limits if you plan to qualify for a USDA loan. The USDA has a handy tool available to help you determine your income eligibility.
Applicants are typically eligible if:
In addition to the eligibility requirements put in place by the USDA, certain lenders may have their own requirements and internal guidelines for eligible applicants.
Along with the eligibility requirements placed on the applicant, USDA ‘Rural Development’ loans impose eligibility requirements on the location and property you plan to occupy.
With the USDA ‘Rural Development’ loan, your home must be located in a rural area. Fortunately, the USDA’s definition of “rural” is liberal. Many small towns meet the “rural” requirements, as do suburbs and exurbs of most major U.S. cities. Conveniently, 97% of the geographical U.S. is USDA loan-eligible with only major metropolitan areas generally being excluded.
To verify if the property you intend to purchase is an eligible location, the USDA has a handy tool to check eligible addresses.
In addition to the “rural” location requirements, USDA applicants must purchase a home that meets the USDA loan property requirements. The main goal of the USDA ‘Rural Development’ loan is to enable homeownership by helping low-to-moderate-income households find a safe residence, either through a build, purchase, or refinance home loan.
To help meet this goal, the USDA sets basic property requirements. These requirements include:
Additional requirements are in place for both location and property eligibility.
USDA Resource Center
P.O. Box 12132, Atlanta, GA 30355
The included content is intended for informational purposes only and should not be relied upon as professional advice. Additional terms and conditions apply. Not all applicants will qualify. Consult with a finance professional for tax advice or a mortgage professional to address your mortgage questions or concerns. THIS PRODUCT OR SERVICE HAS NOT BEEN APPROVED OR ENDORSED BY ANY GOVERNMENTAL AGENCY, AND THIS OFFER IS NOT BEING MADE BY AN AGENCY OF THE GOVERNMENT. This is an educational advertisement. No copyright infringement is intended. Prepared 06/08/2020. Copyright © 2022 USDA LOANS - All Rights Reserved.
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