USDA Loan Eligibility Is Location-Based
There aren’t many zero-down loans available in the market these days.
The VA loan requires eligible military service, but the USDA loan’s eligibility is based on something else: location of the property.
These loans were created to spur economic development in less-dense areas of the U.S. (hence the “other” name — Rural Development, or RD loan). As such, buyers can use the loan within certain geographical boundaries as published on USDA’s eligibility maps.
So, how do you find an eligible property? It’s easier than you think.
Geographic Eligibility For A USDA Mortgage
The USDA maintains interactive eligibility maps online for easy search. Areas shaded in tan are ineligible. Homes outside those areas can be purchased with a zero-down USDA loan.
You can pinpoint an address or browse neighborhoods and cities.
This sample of Corpus Christi shows the vast USDA-eligible areas outside densely populated centers.
“There’s No Way My Area Is Eligible”
This is what suburban home buyers typically think before they search eligibility maps.
Often, they discover USDA-eligible homes within 30 minutes of their workplace.
As stated above, map boundaries are still based on population numbers from nearly 20 years ago. Technically, to be USDA-eligible a city or town must:
- Have a population of less than 20,000
- Be rural in character
- Have a lack of available credit.
Yet, new rules still classify an area as rural if its population is below 35,000, until information is received from the 2020 census.
Cities with considerable population remain eligible for the Rural Housing loan — for the time being.
How can I find out if I qualify for a USDA loan?
USDA financing removes traditional barriers to homeownership. Many home buyers worry their credit history isn’t good enough to get a mortgage. However, USDA loans are lenient when it comes to credit scores.
Check your eligibility for this zero-down mortgage and be on your way to homeownership.
Submit your information below.