Is there an acreage limit on USDA Rural Home Loans?
Are you restricted on acreage with a USDA loan?
Acreage questions and USDA loans seem to go hand in hand, and because this is a common question that we receive I want to explain the details and help separate fact from fiction.
Also, if you have not yet done so, feel free to download our newest “USDA Blueprint” with the link below. This free guide is designed to help walk you through the USDA process step-by-step and is a great educational resource for both homebuyers and Realtors alike.
Do USDA Loans have an acreage limit?
As a starting point, remember the title of the program is the USDA Single Family Housing Guaranteed Loan Program and because this is for single family housing, it is not designed to be a loan solution for working farms or income producing properties.
Now, to answer our question, USDA Rural Home Loans do NOT have an acreage limit!
This is a great improvement to previous USDA guidelines that had such limitations and with this added flexibility, it now provides the potential to increase both the amount of acres you can finance with a USDA loan along with available property types.
However, when working with higher acreage properties please keep in mind the following USDA requirements:
- The site must be typical for the area.
- The site must not include: income-producing land or buildings to be used principally for income-producing purposes.
- Additionally, vacant land without eligible residential improvements, or property used primarily for agriculture, farming or commercial enterprise is ineligible for a loan guarantee.
It is also important to remember that when determining their market value, appraisers will look to compare other similar sized acreage properties that have recently closed.
Unique properties can require additional review upfront, so if you have any questions, contact my team so we can start to review and help determine how many acres you can buy with a USDA loan.
In summary, do not assume that a property may or may not be eligible for a USDA just based on its acreage. Comparable sales in the area will help to justify if the site value is typical for the area.
I founded Metroplex Mortgage Services way back in 2001 and on top of being a top ranked USDA Approved Lender, my team is known for our overall government loan expertise and helping walk homebuyers through the mortgage qualifying maze.
If you need help, that is what we are here for, just call or email to discuss your scenario and let us show you the “Metroplex” difference.
(800)806-9836 Ext. 280
As always, I want everyone to make it a great day and I look forward to seeing you right here for the next tip of the week!
Don’t forget to download our USDA blueprint for success with this link below: