CBC Mortgage Agency

NMLS: 1186381
912 W. Baxter Drive, Suite 150
South Jordan, Utah 84095

Main: 866.563.3507
Servicing: 866.563.7572
Fax: 435.237.0022

How to Help Rural Borrowers Overcome Homeownership Hurdles 

September 6, 2023 By

Smart lenders are always looking beyond traditional financing solutions to find new ways to serve homebuyers. But right now, one of the biggest challenges buyers face is affordability.  

In fact, between rising home prices and soaring interest rates, it’s been a long time since low- and moderate-income families faced so much difficulty trying to buy a home. Borrowers in smaller, out-of-the-way markets haven’t been spared, either. Thanks to pandemic migration and the increase in remote work, even rural communities are facing tight inventory and high housing costs.  

Fortunately, there is a fantastic tool you can use to assist these borrowers and expand your business: USDA loans. There may be no better time to embrace them, either—and CBC Mortgage Agency can help.  

A Catalyst for Growth  

While historically underutilized, USDA loans have become a source of strength for homebuyers in smaller markets and an indispensable tool for growth for lenders struggling to generate new business. But first, let’s clear up some misconceptions about them, shall we? 

USDA loans are not loans for farmers—the USDA has a separate loan program for them. Rather, USDA loans were created specifically to provide low- and moderate-income borrowers with 100% financing to buy single-family homes in rural markets, with the goal of building stronger communities.  

If your organization has limited experience with USDA loans, you may be unaware just how many areas qualify for USDA financing. Basically, USDA loans can be used anywhere that is outside of a major metropolitan area and has 35,000 or fewer residents—yet many areas one might consider suburbs also qualify.  

More borrowers could qualify for USDA loans than you might realize, too. The USDA has a very generous take on its “moderate income” requirements, as borrowers can earn up to 115% of an area’s median income and still be approved.  

Overcoming USDA Hurdles 

Successfully selling, originating, and underwriting USDA loans is not without its twists and turns. There are specific guidelines involving the borrower and the property that must be met. For example, the home must be the borrower’s primary residence, be structurally sound, and have working heating, cooling, plumbing and electrical systems. There are other limitations, too—for instance, in-ground pools aren’t allowed.  

The USDA doesn’t underwrite loans, but instead relies on lenders to make sound underwriting decisions and ensure every loan is manufactured responsibility. That usually means lenders need to be approved to sell USDA loans, but the process of getting direct approval from the USDA is neither fast nor easy.  

There is, however, a way to bypass the extensive approval process. You could work with a secondary market partner that already has USDA approval. And if you’re starting to think about finding such a partner, look no further.  

Start Helping Borrowers Today 

Earlier this year, CBC Mortgage Agency got approval from the USDA to provide USDA loans—which means our correspondent lending partners can deliver this product to CBC Mortgage Agency. In addition to providing USDA loans, CBC Mortgage Agency continues to provide down payment assistance under the FHA that enables borrowers to achieve homeownership with little or no down payment.  

Our correspondent partners now have access to one more powerful resource to better serve a wider range of borrowers in rural and semi-rural areas. This opportunity transcends mere numbers—it's a chance to help more deserving families, one home at a time. 

To find out more, give us a call at 866-563-3507 or email us at info@chenoafund.org to learn more about our USDA 30 program and guidelines.