How To Use the USDA Loan Map in Your House Hunt
The USDA loan map is an interactive resource for people interested in buying a home using a loan backed by the U.S. Department of Agriculture (USDA). USDA loans offer accessible financing to low- and moderate-income borrowers, but the home has to be in an eligible area. The USDA loan map makes it simple to find out if a home or area you are interested in falls into the areas designated as eligible by the USDA.
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What is the USDA loan map?
The USDA loan map, also known as the USDA eligibility map, offers house hunters a way to determine where you can finance homes with a USDA loan. Since USDA loans are limited to homes located in areas that meet the USDA’s definition of a rural location, one of the first steps to applying for a USDA loan is to see if the neighborhood where you want to buy a home qualifies as rural.
If you’ve been looking at houses already and have a specific home in mind, you can use the USDA loan map to check that address. It will tell you whether USDA financing is an option.
However, keep in mind that if a property is in an area designated as rural on the USDA loan map, that doesn’t guarantee that you’ll be able to finance it with a USDA loan. You’ll still have to submit a loan application to determine your eligibility for a loan based on your financial situation.
The USDA offers a few separate interactive tools to help you assess whether a USDA loan could work for someone with your income.
- The Income Eligibility Calculator. Enter your financial, household and location information to find out whether you qualify for a USDA Single Family Housing Guaranteed loan.
- The Single Family Housing Self-Assessment. Enter information about your household, location and whether you want to build, purchase or refinance a home to find out if a USDA Single Family Housing Direct Loan is an option for you.
USDA property eligibility requirements
“Property eligibility” may not be a familiar term, even if you’ve purchased a home in the past, but it’s relatively simple: property eligibility requirements are limitations on which properties can be financed with a USDA loan. Because the USDA loan program is designed to improve access to affordable homeownership in rural areas, it has more specific requirements about the properties it will finance than the average loan program. Here are some of the main eligibility requirements for properties purchased using USDA loans.
Location: must be rural
All lenders review the value of a property before deciding if they will approve a mortgage. However since the USDA loan program is designed to provide loans for low- and moderate-income households in rural areas specifically, they impose an additional requirement that the property be located in an approved rural area. But keep in mind that, while most of us may think farms, fields and tiny villages define a rural area, the USDA definition of a designated rural area is broader.
The USDA eligibility map offers an initial way to search locations and identify areas that qualify as “rural” for the purposes of getting a USDA loan. If you’re shopping for a home in an area that you think could be defined as rural, check the USDA property eligibility map first to see if USDA financing is a viable option.
What qualifies as a designated rural area?
The USDA defines a rural area as any area that is:
- Not part of an urban area. This can include a wide variety of land types, including open country, towns, villages and even some cities.
- Has a small population, consisting of any of the following:
- 2,500 inhabitants or less
- Between 2,500 and 10,000 inhabitants but “rural in character”
- More than 10,000 inhabitants but not more than 20,000
- Not within a Metropolitan Statistical Area (MSA)
- Has a “serious lack of mortgage credit,” which is determined by the Secretary of Agriculture and the Secretary of Housing and Urban Development (HUD).
Each USDA field office re-evaluates the designation of the land in its local area every three to five years.
Property type: must be a single-family dwelling
The USDA’s definition includes detached single-family homes; attached homes such as a duplex, townhouse or villa; a condo; a modular home or a manufactured home. It must also be a primary residence.
Quality: must be safe, sanitary and sound
Homes financed with USDA loans must meet the HUD’s minimum property requirements outlined in the HUD Single Family Housing Policy Handbook. These standards also apply to homes financed with Federal Housing Administration (FHA) loans, and address the very basic aspects of a home that ensure a minimum level of comfort, health and safety. They include requirements such as access to clean, hot water; sufficient systems for dealing with human waste; electricity; and adequate heating.
Property value and size: must be modest
USDA loan programs are intended to be used to purchase “modest” homes, which means that eligible properties cannot:
- Be used primarily for producing income, for example, through farming, agriculture or any other commercial use.
- Consist of buildings designed for industrial or commercial use, rather than residential use.
- Be worth more than the loan limit for the area they are located in. There are loan limits for homes purchased with some types of USDA loans. The limits are typically 80% of the local HUD 203(b) limit, but there are exceptions.
- Have excessively large living areas. Most dwellings financed by USDA loans are 2,000 square feet or less. However, eligible properties can be any size — there is no specific size limit on acreage.
- Have certain prohibited amenities, like in-ground swimming pools, if you’re using a USDA Direct Loan.
How to use the USDA loan map
Whether you have a property in mind that you want to buy or you want to look for USDA-eligible homes, start by opening the USDA loan map and follow these steps:
Step 1 If you have a specific address to check, type the full address (including the ZIP code) into the search bar on the map. Then, click “Go” next to the search bar.
Step 2 The map will zero in on the address and put a pushpin on the location. Then, you’ll see a pop-up that will let you know immediately if that address is or is not located in an eligible area.
Step 3 If you want to continue searching on the map for another address, click on the pushpin icon above the map next to the search bar.
Step 4 If you want to print a map copy at any time, you can click on the printer icon next to the search bar.
Step 5 If you don’t have a property address to check, you can zoom out on the map and look at a larger area. You’ll notice that some areas have a peach-colored background and others are white. The peach tone indicates that homes in that region are not in USDA-eligible areas. Homes in the USDA loan map sections with a white background are generally USDA-eligible homes.
Step 6 In addition to looking at the color indicators on the USDA property eligibility map, you can click on the pushpin icon and drop it in any location on the map. A pop-up box will tell you whether that location meets USDA property eligibility requirements.
Step 7 Simply refresh your browser if you want to clear the map to start a new search.
Zooming in and out on the USDA loan map can give you an idea of where properties that may meet USDA qualifications are available. While USDA loan requirements start with the location of a property, there are many other USDA loan qualifications to meet.
USDA programs and lenders
USDA rural housing loan programs
Two main USDA loan programs apply to individual homebuyers:
→ Single-Family Housing Direct Loans are called “direct” because they are issued by the USDA, rather than a third-party lender.
→ Single-Family Housing Guaranteed Loans are issued by a lender but “guaranteed” by the USDA. If you default on your loan, the USDA will pay the lender up to 90% of the loan balance.
For homeowners who need help making home improvements, the USDA also offers:
→ Section 504 Single Family Repair Loans and Grants help rural homeowners with very low income pay for home repairs. To qualify, homeowners must make less than 50% of the median income in their area.
How to apply: finding USDA lenders
As mentioned above, USDA direct loans come directly from the government. This means skipping the search for a lender and applying directly at a USDA office. You can look up your Rural Development state office on the USDA website.
Third-party lenders issue USDA Guaranteed loans. To find a lender in your area, you can use the USDA list of active Single Family Housing Guaranteed Loan Program (SFHGLP) Lenders. The list shows lenders that have recently issued USDA loans in each state, but don’t feel limited to this list only.