When Can You Use a USDA Loan to Purchase Your Home?

Over the last several months, we have been diving into detail on some of the loan options available for home buyers including the VA loan and the FHA loan. This month, we sat down with Kristy Noll, an underwriter with The Mortgage Company, to discuss another type of loan available, that most people may not know about: The USDA Loan.

USDA stands for the U.S Department of Agriculture but you’ll often hear the USDA Loan referred to as the Rural Development loan as well. That is because the Office of Rural Development is under the Department of Agriculture. But a USDA loan and a Rural Development loan are the same loan. It is a government insured loan and it specializes in rural areas outside of metropolitan cities.

When a loan is government insured, it means the government provides the funding. The USDA sets aside a certain amount of money each year specifically for these types of loans. Their goal is to help develop rural areas and help those who might need a little assistance in buying a home.

Where do USDA Loans work?

USDA loans are specifically for rural areas outside of metropolitan areas. That does not mean that it only pertains to farmland. In fact, the property must be residential, not farmland, a common misconception of the USDA Loan. Examples of properties are single family homes, multi-unit properties, condominiums, and even manufactured homes. Any area that is around a metropolitan area typically does not qualify. For example, there are not a lot of areas around Denver-metro that are eligible. There are some eligible areas in Weld County, Southern Colorado, Canon City, and way out East, but nothing close to Denver or surrounding areas.

In order to determine if a property is eligible for the USDA loan, you can go to the USDA Website, and enter your property address, and it will let you know if it is eligible or not.

The USDA loan is a little-known option that is available and is a great resource. Your loan officer should definitely, if you are looking in a rural area and you fit the criteria, offer this resource as an option for you. Make sure to ask your loan officer about it.



Kristy Noll

DE Underwriter









Cheri Landin


NMLS #68929