USDA Eligibility Maps: What They Are And How To Use Them
February 02, 2024 6-minute read
Author: Laura Gariepy
If you’re interested in learning more about home loans from the United States Department of Agriculture (USDA), but you’re not sure if your target area qualifies, a USDA eligibility map can help you determine if it does.
While Rocket Mortgage® does not offer USDA loans or provide this tool, we’ll show you how to access and use it. That way, you can learn if a USDA loan is a viable financing option for your new house.
What Are USDA Eligibility Maps?
USDA eligibility maps show you which areas have properties that may qualify for a USDA loan. Also known as USDA home loan maps, USDA property eligibility maps, USDA mortgage maps or USDA loan maps, these geographic charts let you check desired parcels for eligibility before getting too deep into the research process. These maps are primarily created based on area population and may get updated on an annual basis.
See What You Qualify For
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How To Use USDA Loan Eligibility Maps In Your Area
Using a USDA loan eligibility map is a relatively simple process. To start, go to the USDA’s interactive map and enter the address of a property you’re thinking about buying.
You’ll see a thumbtack appear on the screen to mark the location and receive an instant answer as to whether the property is in an eligible area. Ineligible areas will be shaded in red. Depending on where you’re searching, you may see eligible areas nearby. If the parcel seems to be on the line between an eligible and ineligible area, you may want to contact the USDA Rural Development office for clarification.
Please note that the USDA property eligibility map is an informational tool only and doesn’t guarantee accuracy. To ensure that your desired property qualifies for the loan program, you’ll have to apply for the mortgage officially.
What Does ‘Property Eligibility’ Mean?
Property eligibility refers to whether a parcel of land qualifies for the USDA’s direct rural housing loan program. Under this program, low-income home buyers can secure affordable housing in select areas using the government as their lender. Borrowers may also use funds to build or renovate a dwelling. Here are some key USDA direct loan features:
- No requirements for a down payment: No down payment is required for a USDA direct loan (unless you have too many assets).
- Fixed interest rates: Borrowers receive a fixed interest rate between 1% – 2.50%. The lowest rate is only available if you qualify for payment assistance.
- Longer term lengths: USDA direct loans have terms of 33 or 38 years. The 38-year term is only available if you have very low income, while USDA home improvement loans come with a 20-year term.
If you receive payment assistance and then move or sell the property, you’ll have to repay the amount given to you. Plus, you’ll have to pay up to 1% of the original loan balance as a guarantee fee at closing – or roll it into your mortgage. This fee funds the USDA loan program.
Property Eligibility Requirements For USDA Loans
To be eligible for the USDA loan program, a property must be:
Located In A Rural Area
Properties that are purchased with a USDA loan must be located in an approved rural area. Rural areas are generally defined as a region outside of a major city with fewer than 35,000 residents. This requirement is because USDA loans are intended for low- and moderate-income households that are located in rural areas. That said, many small towns and suburbs qualify as rural under these guidelines.
Used As A Primary Residence
In order to take out a USDA loan, the home you are purchasing must be used as a primary residence only, not for vacation purposes or income-generating endeavors. A variety of property types can be used as a primary residence for borrowers, including new construction homes, condos, townhomes, modular and manufactured homes and even foreclosed homes.
A Modest Size
USDA loans are intended to help home buyers purchase modest-sized homes. The USDA defines this as homes that are less than 2,000 square feet in size (typically). It’s important to note that there’s no limit to property size, meaning there’s no limit to the amount of land the home is on.
Structurally sound and fully functional
In order to qualify for a USDA loan, the property you’re looking to buy must meet certain safety requirements. The home must have a structurally sound foundation, an adequate roofing system and all major systems including heating and cooling, plumbing and electric.
Without An In-Ground Swimming Pool
USDA loans can’t be used to purchase homes that have an in-ground pool, as well as certain other amenities.
Please note: This isn’t an exhaustive list of requirements. For the full scoop in your area, reach out to your nearest USDA Rural Development location.
USDA Credit And Income Requirements
You don’t need to meet a specific credit score requirement to qualify for a USDA home loan. However, you have a better chance of getting approved (and going through a smoother underwriting process) if your score is 640 or better.
Plus, to be eligible for the mortgage, you must be able to demonstrate both your ability to repay the loan and your financial need. The program has income limits, so your household income cannot exceed 115% of the median income in your target location.
You can check your USDA income eligibility here.
The Bottom Line
USDA eligibility maps can help you determine if a target property may be able to get financed with a USDA loan. They’re fast and easy to use, simplifying the research portion of the home buying process. While Rocket Mortgage does not offer USDA loans, if you’re leaning toward this type of loan, learn more about USDA loan closing costs and different options for borrowers to cover these fees.
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