The Home Buyer's Korner

Information presented should be used for educational purposes only.

November 2nd, 2014

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USDA Announces New Rural Housing Program Maps

Google+LendersUSDA recently released its new USDA Rural Housing Program Maps and provided us with some great educational material for home buyers I want to share.  USDA uses census tract maps to display the areas in which Rural Development housing loans can be used. The result of the release is that the areas currently deemed as “Rural” will remain generally the same, but many more areas are now included.

USDA determines the eligibility of an area based upon census data and sets a maximum population limit.  Until the 2010 census data was released, it was using the 1990 and 2000 census data and had set the maximum population for the area at 25,000.

I say “area” and not “towns” because it doesn’t go by towns; it uses census tracts.  It is possible for a town or small city to have more than one census tract and that one census tract in a town may be eligible while another may not.  

In 2013, the USDA announced the updated census tracts that would be eligible based upon the newest census data from the 2000 census.  In many states, the data would have effectively reduced the eligible areas by nearly half!

Needless to say it created tremendous uproar from housing organizations and the USDA decided to postpone the implementation of the new maps.

The Agriculture Act of 2014, H.R. 2642 (The Farm Bill) modified section 520, which refers to the Rural Development loan program. The modification included the use of the 2010 census data, but increased the maximum population from 25,000 to 35,000.  This modification will ensure that the eligibility maps will stay generally the same as they have been for the past 13 years.

The Farm Bill also announced that any area deemed a rural area as of 9/30/2013 will remain eligible until 9/30/2014.  Currently, only the areas that transitioned from ineligible to eligible are available on the map.  The USDA noted that a preview of the complete map (including the areas that will become ineligible) will be available for preview this summer; ahead of the 9/30/14 changes.

To view a map or to verify if a home you’re interested in is located in a rural area, you can follow this link  On the left toolbar, click on “Single Family Housing” under the heading of “Property Eligibility”.  Click Accept on the page that follows and you will be taken to the map where you can type in the exact address or the town or the state. 

It’s worth nothing that the USDA Rural Development program allows for home loans on single family dwellings, townhomes and  condo units.  In order for a condo unit to be eligible for USDA financing, it has to be in a Rural area and have an active FNMA Condominium Project Approval or on the FHA Approved Condominium List.  Therefore, no condo approval – no USDA financing. While most of the condominium projects are not in rural areas, there are some that maybe, so check and see if the condo you’re interested in is eligible.

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