1. USDA Rural Development
LenderSelect Mortgage Group
USDA Rural Development

2. What is a Rural Development Mortgage?
USDA Rural Development (RD) loans are a great financing option for:
Low- to moderate-income borrowers
Purchasing a modest primary residence
Eligible rural areas

3. USDA Mortgage Guidelines
Minimum 620 credit score
Income limitations apply (115% of area median)
Guarantee fee of 2.75% (may be financed)
LTV up to 100% of APPRAISED VALUE (not sales price)
Closing costs may be financed if appraisal comes in higher
Guarantee fee may be financed up to 102% LTV

4. USDA Mortgage Guidelines
Primary residences only
Single-family
New manufactured homes
Excess acreage
Cannot exceed 30% of total value (unless deemed typical of area)
Cannot be subdivided
30-yr fixed loan
Borrowers cannot own other properties

5. USDA Mortgage Guidelines
Pest Inspection/Radon
Only if contract or appraisal specifies needed
Septic Inspection
Well Inspection
Always needed
Private Road Maintenance Agreement

6. USDA Mortgage Benefits
No down payment
Not limited to first-time homebuyers
6% seller concessions allowed
Gift funds allowed
Low monthly mortgage insurance (MI)
Low rates, comparable to government loans

7. Things to Remember Properties in flood zones are ineligible
Property flips are ineligible
Condos must be FHA-approved
USDA must review a full loan package prior to closing, which may cause delays
1 - 7 weeks depending on USDA workload
60+ day contracts are highly recommended

8. How Can I Look Up Property Eligibility?
Properties eligible for RD financing must be located in USDA-designated rural areas:

9. How can LSMG help you and your borrowers with USDA?