The National USDA Office in Washington DC has confirmed that they will be using 2010 Census data to update the USDA Rural Development program eligibility maps. Current USDA maps are based on the dated 2000 Census data. This change will not take effect until October 1st, 2014 however the changes will affect many areas nationwide including West Michigan. It is crucial that home buyers, real estate agents and loan officers make note of the upcoming changes ahead of the upcoming deadline.
What is a USDA Rural Development Mortgage?
The USDA Rural Development Mortgage, commonly referred to as an “RD Loan” or “USDA Loan”, is a no down payment mortgage program that allows a home buyer to purchase a home with no money out of pocket. Sellers paid closing costs are also acceptable to cover closing costs, taxes, insurances and escrow setup.
It is important to note that not all borrowers will qualify for RD Loans. There are income limits and property eligibility limitations based on population. This program is intended to serve the rural communities therefore highly populated cities such as Grand Rapids, Kalamazoo, Lansing and Detroit are mostly ineligible for financing.
Future Changes to USDA Loan Eligibility Areas
Changes to eligible areas can be viewed by selecting the applicable program listed under “Future Eligible Areas” at http://eligibility.sc.egov.usda.gov. It is important to note that all applications must close prior to the deadline date of October 1st, 2014 if it is in a future ineligible area. If a real estate transaction is still in process after this deadline, the borrower’s financing will not be approved.
The Map Below shows changes for the Grand Rapids USDA Rural Development program. While Grand Rapids, MI itself has been an ineligible area for the 100% financing program, many of its surrounding areas have been eligible for USDA Guarantee Housing Loans. The upcoming map updates will affect surrounding areas in West Michigan.
Current 2014 USDA Rural Development Eligibility Areas:
Future USDA Rural Development Eligibility Areas Starting October, 1st 2014:
Future Ineligible Areas for West Michigan USDA Rural Housing Loans
Notable additions to future ineligible areas include Allendale, Ada, Forest Hills, Zeeland, Ferrysburg and North Muskegon. On the positive side, areas opening up as eligible include a small section south of Hudsonville/Jamestown Area and a small sliver of Whiteneyville South East of the I-96/M-6 junction.
While it is much easier to use the USDA eligibility map online, ineligible areas do have written descriptions that determine eligibility.
Michigan Counties with Ineligible Areas include:
For a complete list of ineligible areas in Michigan visit: Michigan USDA Loan ineligible Areas
MI Allegan County USDA Rural Development Ineligible Area:
Urban areas in Allegan County are described as:
Bounded on the North by the County Line, on the East by 52nd Street, on the South by 143rd Avenue, and on the West by 61st Street, North to 146th Avenue, West on 146th Avenue to Lake Michigan.
MI Kent County USDA Rural Development Ineligible Areas:
Urban areas in Kent County are described as:
All that area bounded by a line from the Ottawa County Line along 4 Mile Road, East to Cordes Ave, North to 6 Mile Road, East to Grand River, Southeast following the Grand River to Buttrick Avenue, South to 60th Street, West to Hanna Lake Avenue, South to 76th Street, West to Kalamazoo Avenue, South to 84th Street, West to Homerich Avenue, North to 68th Street, West to County Line and North to beginning
MI Muskegon County USDA Rural Development Ineligible Areas:
Urban areas in Muskegon County are described as:
The City of Muskegon and all of the area from Lake Michigan East on Giles Road extended to Hilton Park Road, South to Heights Ravenna Road, West to Dangl Road, South to I-96, South East to County Line, West to Lake Michigan.
MI Ottawa County USDA Rural Development Ineligible Areas:
Urban areas in Ottawa County are described as:
The City of Grand Haven bounded on the North by the County Line from Lake Michigan to 144th Avenue, South to Ferris Road and West to Lake Michigan.
The area in Tallmadge and Georgetown Townships from the East County Line West on Lake Michigan Drive to the Grand River, South-Southeast to 28th Avenue, South to Bauer Road, West to 48th Avenue, South to Quincy Street and East to the County Line.
The Cities of Holland and Zeeland bounded on the North by Quincy Street from Lake Michigan to 88th Street, South to I-96, and South on I-96 to County Line.
Summary: 2014 USDA Rural Development Loan Eligibility Updates
In summary, the USDA has announced they will change the eligibility areas for RD Loans based off more recent Census data. These changes will affect all homebuyers that are seeking USDA Rural Development financing. Buyers, agents and loan officers should make note of the changes in their areas to prepare for the October 1st, 2014 deadline. All loans must close prior to this date if they are in a Future Ineligible Area.
For additional information on USDA Home Loan call a licensed loan officer at 800-555-2098 or request information below: