Applications Closing December 2023


Homeowners are advised to take advantage of a new Mortgage Stimulus Program before it’s gone. This is likely to be the largest benefit program American homeowners have seen.

This Stimulus Program is aimed to help average American citizens and stimulate the economy. Utilizing this new service could get homeowners $271 /mo* or $3,252* per year!

Banks do not want homeowners to know about these programs as they can greatly lower mortgage payments through this simple Government-backed solution.

We recommend checking your eligibility as soon as possible before deadlines are announced or requirements are changed.

To see if you live in an active zip code, just click below.


¹ –

* – Based on Median Home Equity of Americans aged 45 to 54 of $70,000 (U.S. Census Bureau)

Table of Contents

how long do you have to live in a house with a usda loan before selling

how long do you have to live in a house with a usda loan before selling

Decoding USDA Loan Rules: When Can You Sell Your Home? Unveiling the Timeframe

Overview of USDA Loans

USDA Loans are a great way for rural residents to get affordable housing. They come from the US Department of Agriculture and are tailored for low-income people and families. No down payment is required, and they offer low-interest rates and flexibility with credit scores. However, you must meet certain income and debt criteria to qualify for one.

If you’ve already secured a USDA loan for a house, you might be asking yourself: how long do I need to live there before I can sell it? The answer is that there is no set period you must stay in the house after getting a loan. However, if you want to refinance or apply for another loan soon after selling the property, there may be restrictions.

You can sell whenever you want since there’s no time limit with USDA Loans. But, you must be aware of any possible consequences that come with that decision.’s report on USDA loans states that “there’s no hard-and-fast rule” when you can apply for another loan after selling your current home. Generally, it’s recommended to wait at least 12 months before applying again.

Getting a USDA loan is like a tedious chore, but you can still live in a house while you do it!

Requirements for a USDA Loan

To meet the requirements for a USDA loan with regards to residency and property eligibility, in order to sell your house, you need to know about the two sub-sections: residency requirements and eligible properties.

Residency Requirements

To be eligible for a USDA loan, you must meet certain residency requirements. The property must be located in an area considered rural by the USDA. Not only that, you must prove it’s your primary residence.

You must also show proof of living in the US for two years. Non-citizens and permanent residents must prove they’re legally allowed to live and work in the US.

Location and circumstances may affect additional residency requirements. It’s important to get professional advice on your eligibility.

Don’t miss out on this opportunity! Meet all requirements and start the process of securing your dream home with a USDA loan today.

Eligible Properties

USDA loans offer financing for homes in rural areas. Properties must meet certain criteria to be eligible for these loans.

Here are five key points about qualifying properties:

  • The property must be in a USDA-defined rural area.
  • It must be used as a primary residence. Second homes & investment properties don’t qualify.
  • It should be modest and affordable – no swimming pools or hot tubs!
  • It must meet safety and quality standards, with functional plumbing, heating, and electrical systems.
  • Income limits might apply. Borrowers must have incomes below the area median.

To get a USDA loan, borrowers must demonstrate income & creditworthiness. Making a larger down payment than required can increase the chances of getting approved. Plus, get pre-approved before house hunting to know how much you can afford. By meeting all requirements & following these suggestions, borrowers can secure attractive terms & interest rates to make homeownership more accessible in rural areas.

How Long You Must Live in a USDA-Financed Home

To adhere to a USDA-backed loan, you must fulfill their occupancy requirements. However, you might be wondering how long you have to live in the purchased home before you can sell it. The section “How Long You Must Live in a USDA-Financed Home” with the sub-sections “Minimum Occupancy Period, Grace Period” will provide you with a brief solution.

Minimum Occupancy Period

Living in a USDA-financed home means abiding by the Minimum Occupancy Period criterion. You must stay in the property for a certain amount of time before you can sell, lease or transfer possession. This is to make sure you intend to use it as your primary home and stop misuse of the USDA program.

The Minimum Occupancy Period differs based on whether the home is in a rural or suburban area. If it’s rural, you must live there a year from the closing date. But, if it’s suburban, you must remain there for three years from the closing date. Breach of this rule could mean paying back your USDA loan.

It’s essential to track your occupancy during this period and avoid letting out the property or just utilizing it for vacations. Suppose you experience unexpected issues like job loss or other hardships. In that case, some choices may provide relief in particular situations, like renting out for medical or short-term travel reasons.

If you’re buying a USDA financing-eligible house with plans to move before the Minimum Occupancy Period ends, several solutions may help. One option is buying another primary residence in accordance with USDA regulations while still enabling your wanted move. Another option is finding reliable tenants who follow guidelines within legal constraints and agreements made upon transferring control of rental arrangements established between the relevant people.

Grace Period

Signing up for a USDA-financed home? No worries! Just remember the “Residency Requirement” – you must live in the home as your primary residence for at least one year. Don’t rent or sell the property. Comply with all rules from the USDA. And if you want to sell the home after the one-year mark, you must first offer it back to the USDA.

But beware! Not following the requirement can result in penalties. According to Investopedia, “the penalty is 1% of the purchase price or $500 per year.” So, if you’re ready to say goodbye, get your green thumb on and start planting ‘For Sale’ signs in the front yard.

Selling Your USDA-Financed Home

To sell your USDA-financed home without any issues, you must have a clear understanding of the overall selling process. In order to navigate the process with ease, you must educate yourself on the basics. Here are two sub-sections to guide you: the need for prepayment penalty and reselling to another eligible rural resident.

Need for Prepayment Penalty

Selling a home financed through USDA may require a prepayment penalty. This fee is when the homeowner pays off the loan early or sells the property before the loan term is up. It’s because the loan helps low-income families purchase homes and stay in them for an extended period.

The penalty is based on factors like the size of the loan and the time left on it. Homeowners should think if they can pay this fee before selling the home. Consulting a financial advisor is recommended.

Not all USDA loans have a prepayment penalty. Check the loan agreement and inquire about potential fees and penalties.

Pro Tip: Be aware of your USDA loan agreement to avoid fees and penalties when selling your home.

Reselling to Another Eligible Rural Resident

When selling your USDA-financed home, you can consider reselling to another eligible rural resident. No need for a down payment or private mortgage insurance. Plus, the benefits of living in a rural area!

Contact the USDA office servicing your loan. They’ll provide you with a list of potential buyers who meet the eligibility requirements. The buyer must meet with the USDA office and satisfy all necessary qualifications.

If there are no eligible buyers, you may sell to anyone who meets other requirements. But if an eligible buyer comes forward, they’ll be given priority.

Pro Tip: Reach out to local real estate agents with experience in selling USDA properties. They may have connections to potential buyers who meet the eligibility requirements.

Finally, a loophole for those who don’t want to get stuck in rural living – but still enjoy the benefits of a USDA loan. Too bad it’s not that easy to escape mother-in-law’s cooking!

Exceptions to the USDA Loan Residency Requirements

In order to learn about the exceptions to the USDA Loan Residency Requirements with Relocation of Military Personnel and Unforeseeable Circumstances as solutions, let’s explore the ins and outs of the regulations. Find out how these sub-sections may be able to help you if you’re facing circumstances that warrant a move before the required occupancy period elapses.

Relocation of Military Personnel

USDA loan rules make it easier for military personnel who have relocated before or during the loan process. The USDA recognizes that due to military service obligations, these borrowers may not be able to meet residency requirements. This program acknowledges relocation and the inability to maintain residency due to commitments.

Individuals seeking USDA loans want to purchase a home in a particular geographic area. However, relocation for work can bring flexibility to the loan. It’s important to meet other loan prerequisites.

This exemption applies mostly to active-duty personnel, not those who are retired or left active duty a long time ago.

A vivid example: A service member applied for a USDA home loan and moved in. But shortly after, he was deployed overseas. He couldn’t meet the residency requirements and was struggling with payments on the property while abroad. He contacted the lender, provided military orders as proof, and the lender waived the payments till the mission overseas was over.

Unforeseen circumstances won’t stop you from getting USDA loan residency requirements waived.

Unforeseeable Circumstances

Life can be full of surprises. The USDA knows this, and if you have an unexpected event, such as a job transfer or terminal illness, you could qualify for an exception to loan residency requirements.

You’ll need to provide proof, like statements from your medical provider or employer, that the event was unavoidable and out of your control.

Exceptions do come with conditions though. For example, you must keep the house as your primary residence throughout the loan term.

Plus, approval is not guaranteed, as cases are reviewed on an individual basis. The USDA website also states that exception decisions are left to the discretion of lenders and rural development staff.

If you don’t meet USDA loan requirements it could affect more than just your farm dreams.

Consequences of Not Following USDA Loan Requirements

To avoid the negative consequences of not following USDA Loan requirements with a focus on refinancing to a conventional loan and loss of USDA Loan benefits, you need to comply with the rules. Otherwise, you may face the penalty of losing eligibility for USDA loans, refinancing to a conventional loan and forfeiting the benefits provided by a USDA loan.

Refinancing to a Conventional Loan

When considering refinancing, it’s key to follow USDA loan rules. Oversights may have big money consequences down the road. Refinancing a USDA loan into a conventional loan has perks, like cutting monthly payments and no mortgage insurance premiums.

To refinance to a conventional loan, you need enough equity in your home. Plus, a good credit score and a steady income are also must-haves. Weigh all costs involved carefully before deciding.

One woman on her farm failed to obey USDA loan rules when refinancing. She had to own the property for more than 12 months, and only two loan refinances were allowed. Breaking these rules could have serious financial effects on her family’s business finances since they rely on this USDA Loan. Don’t risk it – following the guidelines matters!

Loss of USDA Loan Benefits

Not meeting USDA loan requirements could mean you lose vital loan benefits. This can make it hard to get loans in the future. And it’ll have a big effect on your finances. Things like not meeting income limits, having the wrong credit score or wrong papers could all cause this.

If you don’t follow the USDA loan requirements, you might not be able to get help with healthcare, food, or housing. It could even stop you from buying or keeping a house. That’s why it’s so important to stick to the rules.

To keep your USDA loan benefits, make sure you’ve got the right income and employment papers. You also need to meet the credit score requirements. And remember to pay your mortgage on time and keep up your property insurance.

Complying with USDA loan requirements means you can get affordable financing. The government has simpler credit standards than private mortgages. So you’ll need to make sure you meet them.


For a USDA loan, you must live in the property as your primary residence. Recommended: wait at least one year before selling. This is so USDA rules are followed and no penalty occurs.

Penalties or loan balance repayment could come with selling too soon. Exceptions exist, such as for job relocation or medical issues. It’s best to check with your lender.

USDA loans are made to help low- and moderate-income families who cannot access conventional financing. Thus, selling early may be considered misusing the program’s benefits.

Mortgage News Daily reported a change in USDA guidelines for appraisals when refinancing a home bought with a USDA home loan.

Frequently Asked Questions

Q: How long do I have to live in a house with a USDA loan before selling?

A: Generally, you must live in the property for at least one year before selling if you used a USDA loan to purchase it.

Q: Can I sell my house before the one-year occupancy requirement?

A: Yes, there are some exceptions for unforeseen circumstances, such as job loss or a change in your health.

Q: What happens if I sell the property before the one-year occupancy requirement?

A: You may be required to pay back a portion of the loan’s subsidy that was provided by the government.

Q: Can I refinance my USDA loan before the one-year occupancy requirement?

A: Yes, you can refinance your USDA loan before the one-year occupancy requirement, but you will still be held to the occupancy requirement for the original loan.

Q: What if I transfer ownership to a family member before the one-year occupancy requirement?

A: Transferring ownership to a family member does not exempt you from the occupancy requirement unless the family member takes over the loan and meets the occupancy requirement themselves.

Q: What if I have an emergency and need to move before the one-year occupancy requirement?

A: In certain emergency situations, such as domestic violence, you may be able to request an exemption from the occupancy requirement.

Jeremy Toronto

Jeremy Toronto

Jeremy has working in the mortgage industry since 2013. Really loves to research and give advice to new homeowers when it comes to one of your biggest purchases (your home!) As a property investor and having took the test NMLS has a unique insight into refinancing and getting a mortgage for new homeowners. When not working I like to hike, fish and collect insects (I know wierd right?).

All Posts