USDA Appraisals: What You Need to Know
If you’re applying for a USDA home loan, one crucial step in the approval process is the USDA appraisal. This appraisal ensures that the property meets the USDA’s standards for safety, livability, and fair market value. Unlike a standard appraisal, a USDA appraisal follows specific guidelines to protect both the buyer and the lender. Here’s everything you need to know about USDA home appraisals and how they impact your loan approval.
What is a USDA Appraisal?
A USDA home appraisal is an official property evaluation conducted by a USDA-approved appraiser. This appraisal serves two main purposes:

1. Assessing Fair Market Value – Ensures the home’s price aligns with its true market value to prevent overpaying.

2. Verifying Property Eligibility – Confirms that the home meets the USDA’s minimum property requirements for livability, safety, and location within an eligible rural area.

USDA Appraisal vs. Traditional Appraisal
Unlike conventional loan appraisals, which primarily focus on market value, a USDA appraisal has stricter property condition standards. The home must meet specific safety, sanitary, and structural guidelines to qualify for 100% USDA financing.

USDA Appraisal Requirements
To pass a USDA loan appraisal, the property must meet the following requirements:

• Location Eligibility – The home must be in a designated USDA-eligible rural or suburban area.
• Structural Soundness – No major structural issues, such as foundation cracks, roof damage, or unsafe conditions.
• Functional Utilities – The home must have working electrical, plumbing, heating, and cooling systems.
• Adequate Water Supply & Sewage Disposal – The property must have access to safe drinking water and a functioning septic or sewage system.
• Pest & Hazard-Free – The home must be free of termite infestations, mold, or other health hazards.
• Safe Access – The property must have safe, all-weather road access.

Who Pays for the USDA Appraisal?
Typically, the homebuyer pays for the USDA appraisal, which usually costs between $500 and $700, depending on the property location and size. This fee is often due upfront but may be rolled into the closing costs.
What Happens After the Appraisal?

1. If the home meets USDA standards – The appraisal report is submitted, and the loan moves forward to underwriting.
2. If issues are found – The seller may need to make repairs before the loan is approved.
3. If the home is valued lower than the purchase price – The buyer may need to renegotiate the price or cover the difference out-of-pocket.

How Long Does a USDA Appraisal Take?
The USDA appraisal process typically takes 7 to 14 days, but this can vary based on location and lender processing times.

Does a USDA Loan Require an Inspection?
A USDA appraisal is not the same as a home inspection. While the appraisal ensures the home meets minimum property standards, it does not guarantee that all potential defects are identified. A separate home inspection is recommended to uncover any hidden issues before purchasing.

Final Thoughts
A USDA appraisal is a critical step in securing USDA loan approval. Ensuring your chosen property meets USDA requirements can help you avoid delays and unexpected costs. If you’re planning to buy a home with a USDA loan, working with an experienced lender can streamline the process.

Need help with USDA appraisals? Contact us today to get started on your homebuying journey!