You can only use USDA financing if you buy a home in a rural area and if your total household income doesn’t exceed 115% of the average income for the area. But what does the loan program require to get approved?
As with most loans, you’ll have to pay for an appraisal. This is how the lender determines the home is worth the value you pay for it. What about the home inspection, though? Is this a USDA requirement?
The USDA doesn’t require you to pay for an inspection, but they do highly suggest it, just as we do for any home purchase. The appraiser determines the value of the property and makes sure that it meets the basic USDA guidelines. The appraiser doesn’t look for the specifics the inspector would look for, though, giving you a better idea of the integrity of the home.
The Appraiser May Recommend a Home Inspection
Sometimes appraisers strongly recommend a home inspection. They do this when they see something that they think needs more inspection. The areas the appraiser typically focuses on include:
– Septic tank
If the appraiser doesn’t think these areas are in good working condition or that they could have potential issues, they will suggest an inspection to help protect you.
A Few Required Inspections
There are a few areas that the USDA does require an inspection. If you have a private well or run your own water system, you must have it inspected. The water test will determine if the water is of safe quality for you to use and drink. The inspection ensures that the water meets all state and health codes.
Also, if you have a privately owned sewage system, it will require inspection as well. This can be done by a regular home inspector. If the inspector finds anything that doesn’t meet the code, though, they may request an additional inspection by a specialist.
The Benefit of the Home Inspection
As much as the home inspection isn’t required, it is definitely recommended. If you have an inspection contingency in your contract, it makes sense to pay for the review of the home. It gives you peace of mind knowing that the home is in good condition. If the home does have things wrong with it, you will know going into the sale what is wrong. If it’s something that is too costly, you could back out of the contract without losing your earnest money.
If nothing else, the inspection lets you know what to expect when moving into a home. Wouldn’t you want to know if the roof only has 2 years left on it or if the plumbing was about to go bad? These are things the inspector looks at and lets you know. While it does cost you a little bit of money, it is an investment in your home. It gives you a bargaining tool if you want the seller’s help with the repairs or it helps you prepare for what lies ahead when you move into the home.