No, the property must be located in a USDA-designated rural area, and it must be used as the borrower’s primary family housing. The USDA also has guidelines regarding the condition and type of property that can be purchased. Our Society Mortgage loan officers can help you with USDA loan requirements and help you fund the USDA-eligible home that matches your needs. 

When you get a USDA loan, you need to pay at closing both an upfront guarantee fee and an annual fee. The upfront guarantee fee costs 1% of the loan amount and the annual fee costs 0.35% of the loan amount. You must pay the annual fee with your monthly mortgage payments, this is not a separate out of pocket cost.

While USDA loans offer many benefits, there are some disadvantages you need to consider. One drawback is that USDA loans are only available for rural or suburban areas, which may limit your options if you’re looking to buy in urban or non-qualifying suburban areas. Additionally, USDA loans require payment of both an upfront guarantee fee and an annual fee, which can add to the overall cost of the loan. Finally, USDA loans have stricter income limits, meaning that if you fall into the category of higher-income you may not qualify for this type of loan.