USDA Mortgage Property Guidelines

As mentioned, the USDA does have limitations on what homes are eligible for their No Down Payment Program. The USDA essentially has two requirements for Home Eligibility: Property Location and Property Condition.

Property Location

The home must be in a USDA Approved Geographic Region

The USDA Mortgage Program is also known as the USDA Rural Development Program. All rural areas of Ohio are eligible for the program. A surprising number of towns and suburbs of metro areas are eligible too. Basically, unless you live within the city limits of a sizable Ohio city, it is worth a look to see if the property you wish to purchase is eligible for the No Down Payment USDA Mortgage. Eligibility is determined on a County wide basis.

To determine if your home or potential home is eligible for the USDA program choose your County from the Eligible Counties link in the Navigation Menu.

Property Condition

The home must be in relatively good condition

The USDA requires that properties that use their program meet certain property condition requirements. A home that needs major repair is not a good candidate for the program. You can buy a home that needs a few repairs as long as these repairs are completed prior to closing.

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USDA Property Conditions that will need repair

 

The property must be free of major repairs. The USDA uses a licensed Appraiser as their eyes on the property. If the appraiser notices any items listed below, they will require that these items be corrected prior to closing.

  • Plumbing Leaks

  • Broken/cracked windows

  • Doors or windows that are unable to be opened

  • Exposed/damaged electrical wires 

  • Rooms without heating

  • Cracks in the foundation

  • Homes older than 1978 can not have any chipped or peeling paint due to the presence of lead in paint prior to the 1978 Lead paint Rules

  • Bare exterior wood that is not stained or painted

  • Electrical outlets that are within 6 feet of a water source and not Ground Fault Interrupted (GFI outlets are a cheap and easy installation)

  • Hot or Cold Water that is not operational

 

USDA Property Eligibility Requirements: Key Points

 

Property Location

  • USDA has targeted this program for non-metro areas

  • All rural areas are eligible

  • Towns with populations less than 10,000 are usually eligible

  • Many suburbs of cities are eligible too

  • Outside of the cities, almost all of Ohio is eligible

Property Condition

  • Home must be in decent condition

  • Any small repairs can be made prior to closing

  • Single Family Homes

  • Condos (condo association must be Approved)

  • Manufactured Homes (Doublewides 2006 or newer with permanent foundation)