What properties qualify for a USDA loan?
What properties qualify for a USDA loan? When is a property NOT eligible for a USDA loan? Many times it is equally as important to know what properties do NOT qualify along with what type of home is eligible for a USDA loan. Today’s topic is a common question that I receive from both Realtors and homebuyers, and in today’s video I will break down the details so you will be in the know and to help keep your transaction from falling off the tracks. However, before we get started feel free to download our newest “How To” help guide with the link below. This educational resource is designed to show buyers and their agents how to be proactive and handle the home loan process so you can stay out of trouble before it sneaks up on you! When you hear about USDA Home loan benefits such 100% financing or the ability to finance closing costs, it can be easy to focus on the financial advantages and then forget about what kind of property is actually eligible for a USDA loan. A key step is to first understand what type of house qualifies for a USDA loan and then also be aware of what of properties are considered ineligible for USDA financing. So, what properties qualify for a USDA loan? First off, remember that the USDA Rural Home Loan Program does NOT have set loan limits like FHA or Conventional loans. The maximum loan amount is based on the applicant’s qualifying ability. Although many may automatically assume that higher priced homes are not eligible, that is simply false! Homes that are in subdivisions, gated communities, and even townhomes could all be considered a type of house that qualifies for a USDA loan, pending they are in a USDA eligible area. While it is common to view a traditional single family residence as a type of house that qualifies for a USDA loan, a condominium may also be eligible pending the project itself can be approved or already has an existing type of approval from another agency such as FHA, VA, Fannie Mae, or Freddie Mac. USDA eligibility for condominiums can be on a case by case basis, so contact my team for assistance on your next condo scenario. As of December 1st 2014 USDA guidelines changed and homes with in-ground pools are now a type of house that qualifies for a USDA loan! As you may remember, previous USDA guidelines made it challenging for this type of house to qualify for a USDA loan, but thankfully that is long gone! Now, let’s quickly review what properties are NOT considered eligible for a USDA loan: • Existing Manufactured Homes, • Investment Properties or 2nd Homes,(USDA Loans are only eligible for primary residences) • Properties that include buildings which are designed to be used principally for income-producing purposes such as a barn, silo, or other type of commercial operation for example. While this is not an all inclusive list, it is important to remember that the type of house that qualifies for a USDA loan must be predominantly residential in use, character, and appearance. As you can see, the USDA loan program can be extremely powerful, however be careful you are working with a lender who has a proven track record of success under this unique program. http://www.USDALoanPro.com Download our FREE USDA Blueprint for Success! http://www.usdaloanpro.com/blue-print... GET MORE INSIGHTS More ProTips from USDA Loan Pro: Subscribe on YouTube: http://www.youtube.com/subscription_c... Website: http://www.usdaloanpro.com Facebook: / metroplexmortgage Twitter: / usdaloanpro
