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USDA Loan Eligibility
USDA Loan Eligibility – If you are looking to buy a home with zero down payment, low mortgage rates and reduced mortgage insurance (PMI), then a USDA home loan may be the right solution. In this series, we have been covering all the information that you will need to know as a borrower. This loan program is not available to everyone and there are some strict requirements that the borrower and the property must meet for eligibility.
USDA Location Eligibility
Today, we want to focus on the eligibility requirements of the property itself. The United States Department of Agriculture created the USDA home loan program to stimulate economic growth and residential development in rural areas. Therefore, the house being purchased must be located in an eligible area in order to qualify. You won’t be able to get a USDA loan to buy a condo in the middle of a big city like Atlanta, but you might be surprised at how many places around this region are still deemed “rural” by the USDA!
USDA Loan Eligibility
A USDA Home Loan is a great option for home buyers who meet the eligibility requirements. These special mortgages backed by the United States Department of Agriculture can provide up to 100% financing and other beneficial loan terms. However, both you and the property need to meet specific eligibility requirements for a USDA loan.
First, you can look up the location eligibility using the current USDA maps. This will let you know which geographic areas are eligible for USDA loans.
The USDA defines an eligible “rural” market as one that meets the following criteria:
- Have a population of less than 20,000
- Be rural in character
- Have a lack of available credit
It has actually been a while since the USDA last updated their eligibility map, and that can work in your favor until it is updated with the latest census information. There are also newer rules that will still classify certain areas as rural if the population is below 35,000. Here in the greater Atlanta region, there are rural counties and suburbs that still qualify. We don’t know exactly when or how they will update which areas are eligible. For now, the rules are quite generous and it’s worth looking into a USDA loan if you and your property are eligible.
Who is USDA Home Loan Eligible
USDA home loans are mostly designed for first-time home buyers with low-to-moderate income. Read Parts 2 and 3 to learn more about important borrower eligibility guidelines. Past owners of property may also qualify, as long as they don’t currently own and occupy any other houses. USDA loans are not available to anyone looking to buy a second home, vacation residence or investment property. They must be used toward the purchase of a primary residence only.
Am I Eligible for a USDA Loan?
With the USDA’s online maps and tools, it’s very easy to see if your house or the area you are looking at buying in will qualify for a USDA loan. Then, you will also want to start your application process and see if you are eligible for this type of mortgage loan backed by the USDA. It’s a good idea to get pre-approved before you start your home search or make an offer, especially if you are depending on the zero-down 100% financing available with a USDA loan program.
To check your USDA loan eligibility and start your pre-approval application, contact Moreira Team today.