USDA Rural Development home loans or USDA loans are typically used by medium income households to purchase homes in eligible areas. The funds can also be used to build, repair, renovate or relocate a home, or purchase and prepare sites, including providing water and sewage facilities, although it might be tough to find a lender willing to take on some of the available options.
USDA home loans are available in all 50 states as well as the Virgin Islands, Western Pacific & Puerto Rico. The general guidelines for the loan program are the same throughout all eligible areas. Check with an USDA approved lender to see if they will lend in all areas.
There are two different types of USDA loans. There is a direct program that is handled by your local USDA service center. These loans are for low income households. The second type of USDA loan is the 502 Guaranteed program. These loans are catered to more of a average household income. These loans are done by lenders and banks and are insured through the USDA’s Rural Development program.