If you are a homebuyer looking for a property in a rural area, you may be qualified for mortgage assistance through the U.S. Department of Agriculture’s (USDA) Rural Development program. This program seeks to make homeownership more affordable for more people and build up thriving communities in America’s rural areas.
And, thanks to the USDA’s raising of the household income limits for all U.S. counties/parishes to qualify for the program, more people are eligible to receive financial assistance to buy a home through the organization’s 502 Direct and 502 Guarantee Home Loan Programs.
This is good news for moderate income households who want to buy a property outside of city limits.
What are Rural Development Loans?
Through the USDA Rural Development loans program, qualifying homebuyers can receive up to 100 percent financial for eligible properties. These loans are great for low-to-moderate income families because, as they are backed by the USDA, they do not require a down payment. They also often have lower interest rates than regular mortgage loans. The primary limiters are household income property location.
In order to secure these loans, the household income must be below the set income limits, which have been raised this year, and the property must be located outside of metropolitan city limits.
What are the New Income Limits?
The USDA loan income limits are an eligibility ceiling. If a homebuyer’s household combined total income is less than the USDA’s limit, they can apply for a Rural Development loan. The USDA sets new limits once a year, and those limits are typically capped about 15 percent above the average median income for households in a particular area.
There are standard income limits, but it’s also important to note that there are higher income limits in areas where there are higher costs of living. As of June 8, 2022, the standard income limits are:
- $103,500 for 1-4 member households.
- $136,600 for 5-8 member households.
The USDA’s home loan program is a great option for moderate-income families that are willing to buy a home in the suburbs or out in the country in any of the 50 states. So, before you begin your search for a new home, be sure to consult with your real estate agent and lender about whether or not you qualify for Rural Development loans based on your income. You will also need to find out where the USDA-designated rural areas are in your parish.