What Buyers and Owners Need to Know Now If you’ve been exploring affordable homeownership options in rural communities, you’ve likely heard about the USDA Rural Development housing programs. For years, these programs helped families purchase homes in towns and countryside areas with targeted loans and supports. But big shifts are underway now — and it’s important to know what’s changed, what remains in place, and how it affects both buyers and current homeowners.
After many decades of service, the USDA is no longer funding new Rural Development (RD) housing loan contracts in the way it used to. This means:✔ Properties already in the RD program that have active contracts can continue through to completion under their existing terms.
✔ Once those contracts run their course, buyers and owners will no longer be able to use the old RD funding options and must transition to different loan programs (such as FHA, VA, conventional, or other locally available rural lending initiatives).In simple terms, the program is winding down, not abruptly stopping — but buyers need to plan for life after RD funding.
Although the traditional RD loans are no longer being issued, understanding the past eligibility helps explain who may still be finishing out contracts under the older system:
To qualify for Rural Development housing loans when they were active, applicants generally needed to:✨ Live in a qualified rural area — areas defined by the USDA as rural or semi-rural.
✨ Meet income limits — household income must fall within USDA guidelines, which vary by region and family size.
✨ Be U.S. citizens or eligible non-citizens.
✨ Have the ability to repay the loan — demonstrated through income, credit history, and employment stability.
✨ Not currently own a suitable home — the program focused on helping first-time buyers or buyers without adequate housing. These eligibility criteria governed who could use RD loans to buy or build homes in rural areas while the funding was available.
If you’re among those finishing out an existing RD contract, here’s what you need to know about your responsibilities:
Owners of USDA Rural Development properties typically must:🔹 Maintain the property in good condition — this includes key systems like roofing, plumbing, heating, and structural integrity.🔹 Stay current on mortgage payments — just like with any financing, timely payments are essential.🔹 Live in the home as your primary residence — RD housing wasn’t designed for investment properties or rentals (unless specific exceptions applied).🔹 Follow any use restrictions tied to the loan — some properties have deed covenants or program requirements you agreed to at closing. These commitments help ensure the long-term success and stability of rural neighborhoods.
Insurance is a critical piece of the rural homeownership puzzle:
🏡 Hazard Insurance — Required for all USDA RD properties to protect against fire, wind, hail, and other common perils.💧 Flood Insurance — Required if the home lies in a federally designated flood zone. Even if it’s not required, flood coverage is often a smart investment in rural areas near rivers, streams, and low-lying land.🚗 Liability Coverage — Most hazard policies include liability protection, which is important if someone is injured on your property.Keeping proper insurance safeguards your investment and keeps you compliant with loan terms.
Since no new RD loans are being issued:⭐ Buyers looking for affordable rural homes will need to explore alternative lending programs such as:
Each comes with its own requirements for credit, down payment, and property standards, so working with a knowledgeable lender or realtor is key.
As Rural Development funding phases, out and properties prepare to transition into new programs, experienced property management becomes more important than ever. Navigating compliance, inspections, reporting, and program shifts is not something owners should have to figure out alone. Professional Management Inc. brings decades of steady hands to the table. With over 50 years of property management experience in South Dakota, Professional Management Inc. has worked extensively with HUD, Rural Development, and Public Housing programs. Their team understands the fine print, the inspections, the timelines, and the realities of managing affordable housing in rural communities. From guiding properties through the end of existing RD contracts to managing transitions into alternative programs, Professional Management Inc. offers:
In a housing landscape that’s changing chapters, experience matters. Professional Management Inc. remains a reliable constant for owners who want stability, compliance, and professional oversight — today and into the future.