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USDA Loans

By John Stikes

Real Estate Agent with RE/MAX Select

August 22, 2011 06:29 PM

The United States Department of Agriculture or USDA provides loans to individuals living in what they define as a "rural" area. This is any area outside the lines drawn on a map around urban areas by the USDA. To find out if a home is located in an area which qualifies for a USDA loan, one must verify again the very day when a loan will be applied for. The boundaries are reset from time to time and being wrong could be disaster.

The advantages of getting a USDA loan are primarily two fold. The borrower does not have to make a down payment and does not have to pay mortgage insurance (i.e. PMI). This can be the difference for some buyers in being able to buy or not.

USDA loans can be used to purchase a new or an existing home. There is an income cap, also, which applies to all individuals residing in the home. Check with a qualified real estate professional to determine if you qualify for a USDA loan and if it would be right for you.

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Elite Home Sales Team

Elite Home Sales Team OC - Corona del Mar, CA

A Tenacious and Skilled Real Estate Team

We have very few areas in South Orange County if any at all. Maybe in the canyon areas.

Aug 22, 2011 06:32 PM

Catherine Ulrey

Keller Williams Capital City - Salem, OR

Equestrian and Acreage Property Specialist

I recently learned that USDA does not want a lot of outbuildings on the property. The baffles me, since it is aimed at "rural" property. Where people typically have a shop, or a barn, or both!

Aug 22, 2011 06:33 PM

Anonymous

David Marsh

Great topic, John!

Catherine, Administrative Notice 4590 issued last month provides additional guideance and clarification regarding outbuildings. Outbuildings are allowed so long as they are not farm service buildings or income-producing buildings.

The program was designed to provide modest residential housing to low- and moderate- income family in suburbs, municipalities, and rural areas of lower population density. Outbuildings are fine if the structures are related facilities to the home for residential or recreational use.

However, the loan is not a farm loan or commercial loan. A barn associated with the production of an agricultural commodity or a shop designed for a business or income producing purpose are beyond the scope of this particular USDA program.

David Marsh - http://www.myUSDAlender.com

Aug 23, 2011 02:42 AM

USDA Loans

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