USDA loans are only available in areas the USDA considers rural.
The USDA loan property eligibility map below can help potential homebuyers determine if the home they would like to purchase is in a rural area.
While the USDA property eligibility map shows a general idea of qualified locations, it's best to consult a USDA lender to ensure the location is in fact eligible. This is due to USDA property eligibility changes that occur as laws and populations change.
USDA Loan Property Eligibility Map
Datapoints in the USDA property eligibility map below are sourced from the U.S. Department of Agriculture. Areas in red are not currently eligible for USDA-backed home loans.
Location of the Home
For a home to meet the USDA's rural definition, it must be in an area that's not part of or associated with an urban area.
Guidelines on the definition of a qualified "rural area" include:
- Has a population that doesn't exceed 10,000, or
- Has a population that doesn't exceed 20,000; is not located in a metropolitan statistical area (MSA); and has a serious lack of mortgage credit for low -to moderate-income families, or
- Any area that was once classified as "rural" or a "rural area" and lost its designation due to the 1990, 2000 or 2010 Census may still be eligible if the area's population does not exceed 35,000; the area is rural in character; and the area has a serious lack of mortgage credit for low- and moderate-income families.
These guidelines are generous in the sense that many small towns and suburbs of metropolitan areas fall within the requirements.
Specific USDA Home 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.
The USDA requires the home to be structurally sound, functionally adequate and in good repair. To verify the home is in good repair, a qualified appraiser will inspect and certify that the home meets current minimum property requirements set forth in HUD's Single Family Housing Policy Handbook.
A few of these standards include:
- Access to the property: The property should be easily accessible from a paved or all-weather road surface.
- Structurally sound: The foundation and home must be structurally sound for the life of the mortgage.
- Adequate roof: The roof must prevent the entrance of moisture and provide sufficient minimum economic life.
- Functional heating and cooling: Heating and cooling systems will be assessed, regardless of design, fuel or heat source. Central air is not required, but if installed, it must be operational.
- Operational electric system: The electrical system of the home must be adequate and up to date, with no frayed or exposed wiring. The electrical system must also be able to support typical functions and appliances for the size of the home.
- Suitable plumbing and water flow: The home must have working plumbing and enough water pressure for waste removal.
Additionally, potentially borrowers should know that USDA loans can’t be used to purchase income-producing property. However, a property with acreage, barns, silos and so forth that are no longer in commercial use may still be workable.