What is Considered a Rural Area by the USDA?

USDA Loans

While USDA loans have long been considered only for farmers, many new home buyers are recently discovering all the benefit’s the USDA mortgage program has to offer. For example, USDA home loans have some of the lowest mortgage interest rates in the country, are guaranteed for 30 years, and require absolutely no money down. Besides a few closing costs and small initial fees, you can basically buy a brand new USDA backed home with only a few hundred dollars in your bank account.

USDA Designated Rural Area

However, one of the biggest stipulations for buying a USDA backed home is that the property must be located in a USDA designated rural area. In particular, homes must also be modest in nature, and meet minimum standards regarding waste and water systems. However, while many may think that in order to qualify for a USDA mortgage you need to find a house in the middle of nowhere, this is actually far from the case. A lot of people are actually surprised to find out that almost any area outside of a major metropolitan city is USDA eligible, including over 85% of entire states like Georgia and Missouri.

Rural Area Definition

Rural areas are defined by the USDA as any property in open country that is not part of or associated with an urban area. Rural areas are more closely defined as any town, village, city or densely settled area that has a population of less than 10,000 residents. However, if an area in question is not contained within a Metropolitan Statistical Area (MSA) and has a serious lack of mortgage credit it can have a population of up to 25,000 residents to qualify.

This means that many small communities including suburbs, and small towns may be eligible for a USDA home loan. To find out more information on USDA property eligibility and USDA home loan guidelines please visit the USDA home page or contact your nearest USDA representative.