USDA RD Home Loan Appraisal Requirements in NC
USDA Rural Development regulations contain very few restrictions on the type, size, style, and age of the homes that can be financed… however, you should know that they are interested in homes that have better insulation ratings, and they have historically not liked homes that have in ground swimming pools. We are NOT required to use a HVAC Appraiser who is not familiar with your area!
Dwelling site
- Located in a eligible rural community
- Minimum size that cannot be subdivided into an additional site under existing zoning requirements – they don’t want you to be able to divide the lot and sell it to someone, and having a rental/manufactured home on the property is not a “plus” because that makes it income producing property.
- Contiguous to and have direct access from an all weather road developed in compliance with public body requirements and is dedicated for public use and maintained by a public body or homeowners association that has clearly demonstrated ability to maintain the street(s)
- Capable of providing an adequate water and wastewater disposal system
- Property located in a 100 year flood hazard zone area may not be eligible for financing.
Purchase of existing dwellings
- In ground swimming pools are not eligible
- Structures such as barns and outbuildings designed for income production are not eligible
- Must meet Rural Development thermal performance standards of minimum R rating of 38 in attic and 19 in basement ceilings over unheated space and have functional storm windows and doors
- Must be structurally sound, functionally adequate for the family and in good repair or be repaired with loan funds. Certification from a disinterested third party inspector such as a home inspection service or qualified tradesmen is required for:
- Structural soundness, electrical, heating, plumbing and roof cover
- Water test required for private water system
- Statement or certification on the functional adequacy of private wastewater disposal system from a qualified source such as a contractor who has completed an inspection during a pump out or by a local health organization
- Certification that the home is free of termites or other wood damaging pests
- Property located in a 100 year flood hazard zone may not be eligible for financing.
- A loan may be made on an existing condominium in a project approved by HUD, Fannie Mae or Freddie Mac. Evidence of approval could be documented sales financed by these entities in the project. Condominium documents and association bylaws must be approved by Rural Development’s counsel prior to approval.
Home inspections and certifications may indicate the need for repairs. Rural Development will request the applicant obtain estimates for the repairs. The cost of the repair must be considered in determining the final loan amount. Repair funds may decrease the loan available for purchase of the home. Funds needed for repair must be placed in escrow at closing and are released upon satisfactory completion and inspection by Rural Development. Home Inspections are NOT required by USDA Home Loan Underwriters.
If you are interested in purchasing a home in NC with the USDA Home Loan Program, and have questions about the appraisal process – please call Steve Thorne, NC’s USDA Home Loan Expert 919-649-5058 We do NOT have to use a “HVAC ” appraiser who is not familiar with your area for a USDA Home Loan!
