How to Get a USDA Loan for a Barndominium

When planning out the build process for a barndominium, you are bound to have some challenges. One of the hardest parts of building a barndominium is getting the financing you need to start construction. Fortunately, USDA loans can be a great way to get a loan to start building your dream barndo. Knowing how to get a USDA loan for a barndominium can help you decide if it is right for you. 

USDA loan for a barndominium

USDA loans have been around for many years, but they are starting to become a more popular option. With so many people feeling the pinch of mortgage rates, construction loans have become more difficult. However, getting a USDA loan for a barndominium can help mitigate some of the trouble. This guide has laid out everything you need to know about getting a USDA loan for a barndominium. 

What is a USDA Loan?

USDA loans are home or construction loans that are backed by the federal government. They are given out by the United States Department of Agriculture for buying or building your home. Their main purpose is to encourage people to move out to rural areas instead of overpopulated suburban or urban regions. Because of this, they are only given to people who are planning to build in certain parts of the country. 

Perhaps the most important perk of a USDA loan for a barndominium is the down payment process. These loans usually require little to no down payment, which is unheard of with traditional loans. If you have been wanting to build a home but can’t save up the down payment, they could be a great option. A USDA loan for a barndominium is incredibly accessible. 

How to Get a USDA Loan for a Barndominium 

When you get a USDA loan for a barndominium, it will have to be a construction loan. However, these loans are single-close loans, which are the best type of construction lending. They combine the mortgage closing with the construction closing. This means that you will save quite a bit of money on closing costs over the entire period of the loan. 

If you have decided a USDA loan for a barndominium is the way to go, it is important to understand them. Knowing how the process works and how you can benefit can help you make the right choice. Fortunately, these loans are fairly lenient in all aspects and incredibly accessible. This means you have a much better chance of getting approval than you would with a traditional loan. 

Choose a USDA-Eligible Area

The most important thing to know about getting a USDA loan is that it must be built in an approved area. The point of these loans is to encourage migration out to rural regions. Check the eligibility map to see if any of the approved areas are near where you want to build. This will help you decide if getting a USDA loan for a barndominium is an avenue worth pursuing. 

USDA loan for a barndominium

One thing to keep in mind with the USDA-eligible areas is that rural doesn’t always mean far in the country. Sometimes, it simply means building in a suburban area or somewhere outside of a city center. You may be surprised which areas near you are considered eligible for a USDA loan for a barndominium. Be sure to check the map before you get turned off of the idea. 

Meet the Basic Property Requirements 

Just like with any kind of loan, a USDA loan for a barndominium will have some basic property requirements. Your barndominium must be your primary residence and not be for any commercial purposes. It will also have to be accessible by some kind of road, even if it is in a rural area. Your barndo will also have to have a fully functioning heating and cooling system. 

If you are going to get a USDA loan for a barndominium, the home must be finished. This means it will have to have a structurally sound roof and access to all utilities. This means that things like off-the-grid or tiny homes are usually not going to be eligible. To get a USDA loan, your barndominium must be a complete and fully usable home. 

Find a USDA-Approved Contractor 

The other important requirement to get a USDA loan for a barndominium is to use an approved contractor. Any contractor that you are using will have to get approval from the USDA before they can start work. This means that you should have them lined up and ready to go before applying. This will help streamline the process and ensure you get your USDA loan for a barndominium. 

This requirement also means that you probably won’t be able to act as your own contractor. While you can still do some of the work yourself, you will need to have a supervising contractor on-site. This can add some expenses to your overall cost. However, it will end up being worth it if you don’t have to put down any kind of down payment. 

Meet the Credit and Income Requirements 

If you are going to get a USDA loan for a barndominium, you will have to meet some basic credit and income requirements. While most lenders have stringent regulations, the USDA is slightly more relaxed. This means that even if you have been turned down for a construction loan, you may still be able to get a USDA loan. This is good news for all kinds of builders and buyers. 

USDA loan for a barndominium

To get a USDA loan for a barndominium, you need a minimum credit score of 640. You should also have no more than a 41% debt-to-income ratio. There are also income limits. You may not be eligible if your 1-4 person household makes more than $103,500 per year. This keeps the program open to people with lower incomes. 


Getting a USDA loan for a barndominium is a great option for all kinds of people. Finding an eligible piece of land is a good way to get the financing you need for your barndo. You can get a loan without putting up a huge down payment if you meet the requirements. 

If you would like more helpful guides like this one, check out the rest of There, you will find all kinds of tips and tricks from the pros. You will also find featured barndominiums to help get you inspired for your future custom dream home.