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Home » Renovation Loan » USDA Renovation Loan

USDA Repair, Rehab, and Renovation Loans.

0% Down, 6% Seller Closing Credit Allowed

Buy and fix a house in a designated USDA eligible area with no money down

USDA Renovation Loan Program Benefits

  • 100% Financing No Money Down USDA Renovation Loan Program
  • The USDA Renovation Loan program allows USDA eligible borrowers to create one loan amount, including a repair escrow budget to finance renovation and rehab projects (including major structural repairs), which can be combined with the purchase price
  • Repairs are made after settlement, so there will be no delays on a transaction closing due to appraisal mandated repairs
  • Greater appraised value, as the USDA Appraiser will determine the property value based on the “after-completed value” Vs. the current “as-is value”
  • Lower Monthly Mortgage Insurance or PMI, compared to a comparable FHA Renovation Loan
  • Flexible credit requirements, with credit scores down to 640
  • Safe, secure 30 Year fixed rate mortgage
  • With seller help, no out-of-pocket closing costs
  • Most property types allowed

USDA Renovation Loan Qualification Requirements

  • Property, including projected repairs from the Contractor Proposal, must meet USDA appraisal guidelines
  • HUD Consultant:
    • Not required if total repair/rehab budget is less than $35,000 and no structural repairs required (Limited)
    • Required if total repair/rehab budget is greater than $35,000 and/or structural repairs are required (Standard)
  • Renovations must start within 30 days of settlement and be completed within six months
  • A third-party USDA Renovation Loan Contractor must complete all repairs
  • All borrowers on the loan must have a minimum 640 middle credit score
  • No foreclosure, short-sales, or Chapter 7 bankruptcies permitted within the last three years

USDA Renovation Loan Eligible Repairs:

  • Eligible Repairs:
    • Removing safety and health hazards
    • Making the dwelling accessible to persons with disabilities
    • Repair or installation of septic system and water wells
    • Additions or structural alterations
    • Modernization (kitchens and bathrooms, interior floor cover, exterior siding, etc.)
    • Installation of energy conservation or weatherization feature
    • Repairs to existing swimming pools, hot tubs, or saunas
    • Repairs to accessory dwelling units
  • Ineligible Repairs:
    • Installation of new inground swimming pools, hot tubs, or saunas
    • Repairs to new or existing manufactured homes
    • Repairs to condominiums
    • Converting structures to SFH dwellings (barns, schoolhouses, etc.)
    • Alterations that allow income-producing features
    • Installation of luxury items (exterior fireplaces and kitchens, etc.)
    • Repairs or improvements to common space areas (community meeting rooms, playgrounds, etc.
    • Any repair/removal/remediation of Oil Tanks
    • Tear downs to foundation and rebuilds are not permitted
    • Ineligible repairs for transactions below $35,000 (Limited Transaction):
      • Structural Modifications
      • Any repair/removal/remediation of Oil Tanks
      • Any repair/installation for private water systems (Wells)
      • Any repair/installation for private waste management systems (septic systems, lagoons, cesspools, pits, etc.)
      • Mold remediation

Today's USDA Repair, Rehab, and Renovation Loan Interest Rates

USDA Repair, Rehab, and Renovation Loan interest rates change on a daily basis. 


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