What is a USDA Rural Development loan? The USDA rural development loan program is overseen by the U.S. Department of Agriculture and is designed to make rural housing more affordable. With USDA rural development loans, you can finance 100% of the home value with no down payment.
Income restrictions apply and loans are 30-year fixed rate mortgages. Eligibility for the USDA rural development loan program is also dependent upon property location.
Currently, communities outside of a metropolitan statistical area (MSA) qualify as long as their populations are below 20,000, and inside a metropolitan statistical area as long as their populations are below 10,000. Communities with more than 10,000 people in metropolitan statistical areas would not qualify but for the grandfather clause, which said that communities that were eligible before the 1990 census would remain eligible until Oct. 1 as long as their population remained under 25,000.
On October 1, 2012, the USDA must revise its definition of “rural” as that grandfather clause first enacted in 1990 and extended in 2000 – will expire. This revision will make USDA rural development funding more restrictive. eligibility will be limited to communities with a population less than 20,000 that are not located within a MSA. Half the rural population in America lives within a MSA and will therefore be ineligible for the USDA rural development loan program.
A large number of Florida communities could be affected as well. For a complete list of communities that may potentially be affected by tighter rural development eligibility restrictions click here. Congressional action would be needed to extend current eligibility requirements – but you can still take advantage of less restrictive USDA rural development eligibility criteria.
Need more information on the USDA rural development loan program? Consult a licensed mortgage loan professional at 239-936-4232.
Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved.
Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016. Inlanta Mortgage has recently earned the distinction of being named a 2012 Top Workplace in Southeastern Wisconsin.