USDA Loan Property Requirements
On the same level of importance as the USDA Loan's credit and borrower requirements are the property requirements. The USDA wants to ensure that the primary residence you choose meets certain minimal property requirements to protect the borrower's interest and well-being.
Location of the USDA Loan
Once you find a property, the USDA needs to ensure that it is in what they designate as a rural area. The USDA's definition of a rural area is very liberal. Many suburbs of metropolitan areas fall within the requirements as well as small towns.
Borrowers must fall within at least one of the two main portions of the USDA's definition of rural. These are, a site that is in "open country" or an area that has a population less than 10,000 − or 20,000 in areas that are deemed as an area with a serious lack of mortgage credit.
As for "open country", the USDA requires your Loan Officer to use aerial photographs to determine if your area is considered in open country. The other property requirement will require your Loan Officer to use the latest figures of the decennial U.S. Census of Population for your village or town.
The USDA offers this map as a guide for property requirements; however it is important to note that USDA Loan properties can fall under many special considerations and it is best to talk to your USDALoans.com Loan Officer, with no obligation, to determine if you qualify.
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Specific USDA Home Requirements
To ensure that your home is safe and your well−being is secure, the USDA requires the chosen home to be structurally sound, functionally adequate and be in good repair. If a home is in disrepair, the borrower can use funds to place the home in good repair.
To verify that your home is in good repair, state licensed inspectors will need to inspect and certify that the home meets the USDA's standards. These standards include:
- No termite or pest damage
- Working plumbing, water and sewage disposal
- Functional heating and cooling units
- Operational, and up to date, electrical systems
- Structural soundness