In October, the U.S. Department of Agriculture expanded the list of eligible areas for USDA home loans. Dan Green at Homebuyer.com reported that they incorporated 1,131 areas into the USDA mortgage program for 2024 while removing thirty-six.
Even more noteworthy is that, although the program still confines loans to those purchasing in rural areas, some of the newly added locations are now in closer proximity to large cities. This development is particularly significant for individuals unable to qualify for a traditional mortgage and seeking a low-down-payment loan.
Locations around Kansas City that qualify for a rural development loan are: Lansing, Basehor, Tonganoxie, Bonner Springs, De Soto, Gardner, Edgerton, Wellsville, Ottawa, Spring Hill, Paola, Osawatomie, Louisburg, Peculiar, Pleasant Hill, Lone Jack, Oak Grove, Sibley, Excelsior Springs, Kearney, and Smithville,
Quick Overview of USDA Rural Development Mortgage Loans
For a quick overview of what the USDA offers to homebuyers, it’s essential to understand that USDA home loan programs fall under the purview of the Rural Development Agency. This agency extends financial assistance to low-to-moderate-income families for building, rehabilitating, purchasing, and refinancing homes within the rural areas it serves, using direct loans, loan guarantees, and grants.
Among the most popular USDA home-buying programs are the direct loan and the guaranteed loan. The former is limited to borrowers with low to very low incomes. Since the applicant borrows directly from the USDA to purchase the home, no down payment is required, and closing costs are minimized.
Conversely, the guaranteed loan is designed for those with moderate incomes. While these loans are backed by the USDA, they must be secured through a USDA-approved conventional lender.
Qualifying for a USDA loan entails meeting two criteria: the borrower must qualify, and the intended property must be eligible. Apart from being situated in a USDA-designated rural area (more details to follow), the property must be deemed “modest” for the region, meaning no extravagant or unnecessary features like swimming pools.
This recent expansion of eligible areas offers promising opportunities for homebuyers who may not qualify for conventional mortgages, especially with the increased proximity to urban centers.
Need help finding a USDA Mortgage Officer, call or text the Dowell Family Team at (913) 712-9313.
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