My name is Matt. I'm 29 years old and new to real estate investing. I've spent the last 3 years getting myself completely out of debt (student loans, car loans etc.), listening to the Bigger Pockets Podcast and saving a down payment to start investing in real estate! And man, what a difficult time to be trying to get into the market right now as a first time homebuyer... It's been very stressful thinking about trying to compete in this insane market.
I live in St. George Utah, an extremely booming area just across the Utah-Arizona border. I recently discovered something called a "United Stated Department of Agriculture (USDA) loan". I love the idea of getting out of the city and I would be willing to sacrifice a longer daily commute everyday to live in a more rural desert area around here.
Does anyone have any experience or advice with this type of loan?
My goal would be to take out the loan, buy a small piece of land and build a small (700-800 sq. ft.) home. I am a plumber and I can do the plumbing and a lot of the finish work myself but would need a contractor for most of the bigger construction items like excavation, foundation, framing etc.
Any information would be greatly appreciated!
USDA is for rural property and the subject must be on their map. USDA is not for raw land, needs to have a house on the land when you close. USDA is not a construction to permanent loan. You need a land loan or seller financing until you get your plans and permits together.
@Matt Hockman USDA Rural Development loans are attractive to some because there is no down payment required.
There must be a house, not just land as @Caroline Gerardo pointed out above. The house must not be in need of renovations. It has to be move-in ready and pass a fairly strict inspection that's done to the same standards as FHA or VA loans.
The property must be in an eligible area, but they interpret "rural" pretty loosely. Start here: https://eligibility.sc.egov.us... and click "Accept" in the lower right corner. Then enter the address to determine eligibility.
Generally they want a credit score of 620, though some lenders ask for 640. The additional criteria are called an "overlay".
Talk with local lenders or a mortgage broker for more information, but be aware that not all lenders work with USDA.