Texas Home Loan
Insider Angelo Christian

There are appraisal requirements and guidelines that must be followed with respect to the department of Rural development.

Here is a summary of requirements for the property:

1. No manufactured homes allowed. Although these can be great to own, USDA will not grant credit for a manufactured home. We do have other programs available that we can give you a loan for a manufactured home with low interest rates. 

2. No Floodplain. Properties cannot be located in the 100 year flood plain. Prior to purchasing the home please investigate to see if the property is in a floodplain. If it is and you are determined to get a USDA loan look for another property.

3. Restricted to rural and semi-rural areas deemed by zip code and map

4. Property to be move in ready. Cannot be a fixer upper. Appraisal must pass FHA appraisal guidelines.  This is really commonsense. Must have AC, Furnace, no broken windows, no holes in the roof, you must be able to live in the home by the time of closing. They do not allow cash back fro repairs.

5. Acreage. One of the great things about USDA they do allow you to buy a home with more acreage than a conventional or FHA loan. Generally they like to keep it at 10 acres or less. They will go up to 20 acres provided that there are other homes in the area that also have 20 acres that they can compare it to. For instance, if you want to buy a home with 25 acres and there are no other homes in the area with more than 1 acre then this probably wont work.

6. Well/septic—there does need to be distance of usually 100 ft from the well and septic.