The USDA, or the United States Department of Agriculture, created a home loan program specifically designed for rural property, especially those properties that contains large tracts of acreage. While the property itself must meet certain location requirements, the borrower's qualifications are similar to those of a conventional mortgage. Through the use of the USDA loan program, most borrowers will be able to finance a home on large acreage.
Find a USDA-approved mortgage lender. Most major lending institutions and banks, such as Bank of America and SunTrust, have USDA approval.
Fill out a mortgage loan application and provide the lender with two months worth of pay stubs and bank statements and two years' tax returns. Additional documentation may apply, depending upon your situation.
Allow the lender to pre-qualify you for the USDA loan using your income information. Income eligibility for the program will be required. The income limits vary by state and county and are available through the USDA website.
Sign all applicable USDA documentation as given to you by your lender. Pay for your appraisal through the lender and allow the inspection to be completed on the property.
Keep in constant contact with the lender throughout the underwriting process. Provide the lender with any additional requested information or documentation. The faster your response, the faster the loan will close.
Fill out and sign all applicable documentation at the closing table to complete your mortgage process.
Tips
Check your credit score before applying for financing. Borrowers with the highest credit scores, those above 720, will receive the most favorable rates. To quickly raise your credit score, make sure to pay down any credit card debt to less than 30 percent of the limit.
Warnings
Homes with large acreage are notoriously hard to finance. USDA loans will work in most instances, however, the property has to be deemed rural by USDA standards. A link to the USDA website that classifies addresses can be found in the Resources section of this article.
References
- Rurdev.USDA.gov: Guaranteed Rural Housing Loans
- U.S. Department of Agriculture. "Rural Housing Service." Accessed Dec. 16, 2019.
- FDIC. "USDA: Single Family Housing Guaranteed Loan Program." Accessed Dec. 16, 2019.
- U.S. Department of Agriculture. "Single Family Home Loan Guarantees." Accessed Dec. 16, 2019.
- U.S. Department of Agriculture. "Rural Home Loans (Direct Program)." Accessed Dec. 16, 2019.
- U.S. Department of Housing and Urban Development. "Single Family Housing Programs." Accessed Dec. 16, 2019.
- U.S. Department of Agriculture. "Home Inspection Information." Accessed Dec. 16, 2019.
- U.S. Department of Agriculture. "Refinances." Accessed Dec. 16, 2019.
Tips
- Check your credit score before applying for financing. Borrowers with the highest credit scores, those above 720, will receive the most favorable rates. To quickly raise your credit score, make sure to pay down any credit card debt to less than 30 percent of the limit.
Warnings
- Homes with large acreage are notoriously hard to finance. USDA loans will work in most instances, however, the property has to be deemed rural by USDA standards. A link to the USDA website that classifies addresses can be found in the Resources section of this article.
Writer Bio
Lynn Lauren has been a professional writer since 1999, focusing on the areas of weddings, professional profiles and the banking industry. She has been published in several local magazines including "Elegant Island Weddings." Lauren has a Master of Business Administration and a Bachelor of Business Administration, both with marketing concentrations from Georgia Southern University and Mercer University, respectively.