USDA Home Loans, When Do You Need An Inspection

During the building of a new home, municipalities in North Carolina do routine Building Inspections to determine that construction meets “local building code.”   USDA Home Loans have their own construction requirements that the appraiser is required to certify.  USDA Home Loan new construction guidelines include fairly high insulation requirements, to insure that the homes are Energy Efficient, and the home buyer will not have outrageous power bills.

USDA Home Loan new construction certifications and documents were recently clarified with an announcement indicating when they are needed, and when they are not.

If the home is under construction, or is completely finished, and it has not been Occupied within the last 12 months, then we need:

• Certified Plans and Specifications of the home that shows that the plan and the materials used met or exceeded the local building codes.  The Certification must also indicate that the property meets the USDA Thermal Performance Standards (USDA Rural Housing thermal performance standards).
• The Certificate of Occupancy from the Local Building Permit Department stating that the home has been OK’d as a livable unit.
• A builder’s 1-year home warranty – USDA Builder’s Warranty Form 1924-19
• Copies of the Three Home Inspections done during Construction

If the home is existing, or has been built and un-occupied for more than 12 months – then USDA Home Loan standards will allow us to approve almost any home that meets these standards:

• Is within the USDA Home Loan Eligibility Map approved area for a USDA Loan.
• The home must be functional – in other words, homes that have outside bathrooms, or there’s no way to access bedrooms without going outside will generally not be considered for USDA Home Loan financing in North Carolina.  The USDA Home Loan Program also states that the home should not be above the market value of most properties in the area – in other words, USDA Home Loans are made on “modest” homes in a given area.
• Structurally sound – This is the same for all Government Loans, FHA, Va or USDA Home Loans.  If the home has known defects – those must be fixed PRIOR to closing.  Mold in the Crawl Space will not be allowed to be fixed after closing, for instance.
• Owner occupied only – The rural house you purchase can not be a working farm, and  must be your primary dwelling.  These loans are not for rental property either.
• Swimming Pools are generally difficult to get approved with a USDA Home Loan
• Outbuildings must be typical for the area – or the value of the Out Building will be deducted from the overall value of the property.
• Well and Septic System requirements mirror the FHA guidelines.

If you are considering a home purchase, and need to know if that area is covered by USDA Home Loans, please call us!  Steve and Eleanor Thorne, USDA Mortgage Specialist in NC!  919-649-5058 Do you have more questions about USDA Home Loan new construction guidelines?  Leave us a comment below – I try and answer all inquiries 🙂 Connect with us on Google Plus or Facebook! Remember, the USDA Home Loan Maps could be changing September 30, 2013… in fact, almost 1/3 of North Carolina could LOSE the ability to do USDA Home Loans! Yikes!