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Who and What is Eligible for the USDA Home Loan?

[ 0 ] August 30, 2013 |
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USDA Rural Housing Mortgage

People have a natural desire to belong. Clubs, civic organizations and even companies tap into the basic nature of wanting to be associated with a particular group. Each group has its own requirements for allowing people to join. Some are quite exclusive while others will allow a diverse range of members. Along the same lines, certain people are eligible to participate in the USDA rural housing program and others are not.

Eligible and Ineligible Borrowers

In order to be eligible for the USDA home loan a person must be either a citizen of the United States of America or a resident alien that has established permanent residency in America. That means that the following individuals are not able to apply for the loan:

  • People operating in the USA under diplomatic immunity
  • Corporations, LLC’s, and trusts
  • A resident alien who has not established permanent residency
  • A foreign national

This rule also goes so far as to prevent a co-borrower who does not live at the home. All borrowers must live at the subject property as their main residence.

The buyer can be purchasing their first home or their 39th home. However, the USDA does not allow borrowers to own multiple properties.

Eligible Properties

Most single family homes should meet the USDA requirements for eligibility. This means that a multi-family home, such as a duplex, is not allowed.  Condos that cannot be warrantied are also not permitted.

While the USDA will fund the purchase of a home with land, there are some rules about the value. If the appraised value of the surrounding land is more than 30% of the total property price then the USDA will not fund the loan. Similarly, the USDA does not allow mortgages for the purchase of only land.

The appraisal will ensure that the home is good working condition and void of any major problems. To be on the safe side it is always advisable that potential home buyers order a full inspection. Getting a trained professional to look over the home and point any item that needs immediate repair is a great peace of mind for many borrowers.

View our USDA Rural Housing loans page for additional information. For questions or to see if you qualify, please contact us or apply online!

Resources:

USDA Income Limits
USDA Guarantee Fee
USDA Ineligible Areas

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Category: USDA Loans

About Aiman Abozeid:

I am the Branch Manager at Inlanta Mortgage Madison office, I have been serving the state of WI and Madison area for over 13 years, starting first with First Wisconsin Mortgage and now with Inlanta Mortgage I have focused my attention in providing my customers with a easy, painless loan process.

Inlanta Mortgage has emerged as one of the leaders in mortgage banking in the Madison area by focusing on developing relationships and creating a “value” for each customer they service. One of my firm beliefs is handling each customer independently of the next, providing knowledge, accountability, and exceptional service. Inlanta incorporates each of these characteristics in maintaining their business strategies and insuring future customer loyalty.

By working with me, you have the ability to experience a processing system right here in Madison, yet get the benefit of many different lenders and the niche’s they serve. Local service means quick decisions and closings that will happen on time. Since buying a home is one of the most important decisions of a person’s life, I have to make sure it’s a smooth and enjoyable process. I specialize in many different purchase programs from first time home buyers to move up buyers or investment properties, we have all the latest mortgage programs available including Reverse Mortgages for people over 62 years of age which is becoming a very popular loan alternative.

Aiman Abozeid
Email Me
Toll Free: 877-240-5810
NMLS ID #237450

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