What Houses Qualify for USDA Loans?
If you're looking to purchase a home in a rural area, the United States Department of Agriculture (USDA) offers loans that can help you do so. However, not all homes qualify for USDA loans. Below, we'll take a look at what houses are eligible for this type of financing.
USDA Loan Overview
Before we dive into the specifics of eligible houses, let's first review what USDA loans are and how they differ from other types of mortgages.
USDA loans are backed by the USDA and designed to help borrowers in rural areas become homeowners. These loans offer 100% financing (meaning, no down payment is required), low interest rates, and flexible credit requirements.
Eligible Property Types
Now, let's talk about what types of properties are eligible for USDA loans.
Single-family homes: These are the most common types of homes that are eligible for USDA financing. To qualify, the home must be located in a rural area (as defined by the USDA), and must be the borrower's primary residence.
Condos: USDA loans can be used to purchase condos, as long as the condo project is approved by the USDA.
Manufactured homes: Manufactured homes may also be eligible for USDA financing, but only if they are new and meet certain safety and construction standards.
Modular homes: Modular homes are generally eligible for USDA financing, as long as they meet the same standards as stick-built homes.
Farms: USDA loans cannot be used to purchase farms or other income-producing properties.
USDA Property Eligibility Map
To determine if a specific property is eligible for USDA financing, you can use the USDA property eligibility map. This online tool allows you to enter an address and see if the property is located in an eligible rural area. Keep in mind that the map is updated annually, so it's important to check back periodically if you're still in the home search process.
USDA Loan Income Requirements
In addition to property eligibility, borrowers must also meet certain income requirements to qualify for USDA loans. These requirements vary by location and family size, so be sure to check the USDA's income eligibility guidelines for your specific area.
Applying for a USDA Loan
If you're interested in applying for a USDA loan, the first step is to find a lender who offers this type of financing. Mortgage Brokers Pro is one such lender. We have years of experience helping borrowers obtain USDA loans, and can guide you through the process from start to finish.
To get started, you'll need to provide documentation of your income, employment, and other financial information. Your lender will use this information to determine if you meet the USDA's qualifying criteria. Keep in mind that the application process can take several weeks, so it's important to be patient and provide all requested documents in a timely manner.
Benefits of USDA Loans
There are many benefits to choosing a USDA loan over other types of financing. Some of these benefits include:
Conclusion
In conclusion, USDA loans are a great option for borrowers who want to purchase a home in a rural area. Eligible properties include single-family homes, condos, manufactured homes, and modular homes. However, farms and other income-producing properties are not eligible. To determine if a property is eligible for USDA financing, use the USDA property eligibility map. If you're ready to apply for a USDA loan, contact Mortgage Brokers Pro to get started.