Local officials in the Department of Agriculture (USDA) are saying that Rural Housing eligibility areas will change as of March 2013 based on the 2010 Census. Far fewer homes in Spotsylvania and Stafford Counties will be eligible for Rural Housing (RD) loans after the changes. One USDA employee in the Richmond, Virginia state office estimates that Stafford County will be virtually eliminated as RD eligible. Spotsylvania may lose nearly half of the addresses that currently qualify for RD financing.
RD are very popular among savvy home buyers because the mortgages are among the few available that still offer no money down purchases. No money down purchases with a variety of loan products were common during the mid 2000’s housing boom. Today, VA loans to military veterans and RD loans are among the very few no money down products that survived the housing and mortgage crisis.
RD loans are supposed to service rural areas based on census data. However, eligible areas haven’t been updated in years. Spotsylvania and Stafford have grown like teenagers over the past two decades. Consequently, built-up areas such as England Run and Stafford Lakes, including town homes, are still eligible for RD loans. These communities are just off US 17 and are only a traffic light or two from I-95.
RD Guaranteed Loans are available from lending institutions certified by USDA to issue the mortgages that government-backed much like FHA loans. A second RD product, Direct Loans, are issued directly from USDA. RD Direct loans are subsidized providing a very low payment for buyers with modest incomes.
Fredericksburg area home buyers who aren’t veterans need to move quickly if they want to take advantage of no-money-down RD financing. Attractive Fredericksburg, Stafford, and Spotsylvania neighborhoods including South Oaks, England Run, Lancaster Gate, Holleybrooke, Salem Fields, and Red Rose Village are still RD eligible. All are commuter friendly with easy access to I-95, commuter rail, Fredericksburg, Quantico, and points north. USDA hasn’t said where the new lines will be drawn. However, it is likely that these and many other communities will disappear from the RD eligible list next March.