Property Eligibility

USDA loans used to be considered the “farmers loan”, however that is not the case anymore. To qualify for an Alabama USDA loan any borrower must be looking to purchase in a rural area only. Rural areas are typically areas that have a surrounding population of less that 30,000.

USDA loans can be used to purchase an new home, an existing home, or refinancing an existing USDA loan. When determining property we tend to look at 2 major things: location (rural areas) and the physical properties of the home.

The physical properties of the home includes several things. The Alabama USDA Home Loan Program isn’t for “fixer uppers”, the home must be in working conditions. When choosing your home know that condos and town houses do qualify as long as they are single family homes only. Also, mobile homes are not include in the qualifications.

Also, when finding the home/property that best fits you and your needs there are some things that you have to be aware of. The property must have an adequate water and water/waste disposal system and other related systems. The property must be inspected and approved by a state or local government agency. The borrower must provide written verification that the water system complies with the Safe Drinking Water Act and the Clean Water Act.

USDA Home Loan borrowers do not have to be first time home buyers, but the home they are purchasing does have to be their primary home. As a borrower under the USDA program you are also able to purchase land and build a home, keeping in mind the land can not represent more than 30% of the total loan.