Eligible Property Types
General Requirements
The property must be located in an
area designated by USDA. >Click
here to see if a property is eligible.
The property must be a single family home and must be located on a
modest site. Modest sites are defined by their size, value, and the
presence of any outbuildings.
 Size: The site must not be large enough
to be subdivided under local subdivision
regulations.
Value: The value of the site must not
exceed 30 percent of the as-improved
market value of the property. The 30 percent
limitation may be exceeded if the site
cannot be subdivided into two or more sites and
the value of the site is typical for
the area.
Farm Buildings: The property must not
include farm service buildings; however,
smaller outbuildings such as storage sheds are
allowed.
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Manufactured
Homes
Manufactured (HUD) homes are
eligible for financing under the Rural Development Loan.
The home must be new (never sold, set, or
occupied).
The dealer of the manufactured home must be
approved by USDA.
The dealer must provide an engineered permanent
foundation.
The dealer must serve as the general contractor
for all construction and
installations.
The dealer/contractor must issue a one-year
builder's warranty provided
on form RD 1924-19 or HUD-92544 or an insured
10-year warranty.
Modular Homes
Modular homes are eligible for
financing under the Rural Development Loan and are handled in the same
manner as stick-built homes built to all local, state, or regional
building codes at their destinations.
Town Homes and Condominiums
Town homes and condominiums are
eligible for financing under the Rural Development Loan if the property
meets all the criteria for approval by one of the following agencies:
FHA, VA, Fannie Mae, Freddie Mac.
Duplexes
Duplexes are eligible for financing
under the Rural Development Loan as long as the borrower purchases only
one half of the property.
Raw Land
Raw land is not eligible under the
Rural Development Loan. However, purchasing land and building a home is
an option with an interim construction loan followed by a USDA take-out
loan. Please visit the Land – Home Opportunities
page for more information.
Leaseholds
Homes may be financed on a leasehold when:
- Long-term leasing of home sites is a well-established
practice in the area
- Such leaseholds are freely marketable in the area
- The borrower is unable to obtain fee title to the
property
- The lease has an unexpired term 40 years from the
date of loan approval
Other
Properties
Other properties may be eligible
under the Rural Development Loan depending on various factors.
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