Because they’re designed to spur growth in rural communities, as well as open the door to homeownership for lower-income Americans, USDA loans come with certain requirements other loan products might not have.
One of the most important? The occupancy requirement.
USDA loans come with what’s called an occupancy requirement – a rule that stipulates who can live in a USDA-funded property and when they can live there.
First and foremost, your USDA-financed property must be your primary residence. You also need to intend to move into the home within 60 days of your loan closing.
A few other stipulations:
Questions about whether you qualify?Find a USDA lender who can work with you every step of the way. →
Lenders will view occupancy scenarios on a case-by-case basis.
Under USDA loan occupancy requirements, there are a number of living situations that are allowed on the property.
These occupancy scenarios include:
In order to make the USDA loan closing process easier – as well as subsequent occupancy of the property – lenders expect borrowers to be clear, up front and honest as they go about the application process.
Borrowers should respond quickly to documentation requests and disclose any use of Powers of Attorney early on in the process to prevent undue delays. The lender has 90 days to close the loan, so preventing potential hurdles is vital to their success – as well as yours as a buyer.
For Americans looking to buy their primary residence – a place to put down roots and enjoy stability – USDA financing can help.
With low rates, no down payment requirements and looser credit and financial guidelines, they open the door to homeownership for buyers of all backgrounds and income levels.
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