In order to qualify, the property must be located in a USDA-eligible area and serve as the buyer’s primary residence. The borrower must also meet certain income and credit requirements, though these tend to be less stringent than other loan programs currently available.

Because they are intended for primary residence, buyers cannot use a USDA loan for investment property.

Primary Residence Requirements

USDA loans are designed to help Americans purchase their primary residence affordably and easily, so rental homes, vacation homes, farm buildings and other income-producing properties aren’t eligible.

Can you use a USDA for land?

That depends. Though purchasing land with the primary purpose of income would violate USDA regulations, buyers may still purchase land with income-producing features located on it. This would include things like barns, silos, livestock facilities and greenhouse, as long as they are not part of a commercial or income-producing operation.Continue reading→