USDA Loan Lenders: The New COVID Niche?

COVID-19 has created a huge increase in business for lenders, and USDA loan lenders are more prevalent. This has also changed where people are looking for homes, which is affecting the city living trend. While some lenders are struggling to catch up and adjust, others are thriving.

The pandemic has forced many to work remotely. With this in mind, experts are saying that urban residents may begin moving away from city living as working from home becomes more permanent. This is a new reality for mortgage originators and USDA loan lenders to adapt to. 

Why is the city living trend shifting?

Almost one-third of Americans are considering moving to less populated areas. This is due to the COVID-19 pandemic, and people wanting to live in less-crowded areas. Public health has made it clear that living in large cities can be a health risk.

It is speculated that people are moving away from high-density central business districts and high-rise residential properties.

Real estate agents shared that many prospective home-buyers were looking to purchase outside of cities. These decisions were backed by concerns about a second wave of pandemic-related restrictions. House hunters are leaving behind the urban city living and instead looking in rural communities and even small towns. 

What’s next? 

According to real estate agents, many home-buyers looking for suburban and rural homes are searching for second residences. This means that many are keeping their properties in cities but looking elsewhere for temporary getaways.

Also, the adaptation to remote working may lead to demand for larger homes. That way, they include a separate office and are not dependent on transit. This is a shift in preferences for families. 

As mortgage rates remain at all-time lows, many dream of wide-open spaces due to social distancing. Although, it is difficult to predict how the virus will continue to impact real estate as a whole. Many experts predict that home prices will continue to increase, just at a slower pace. 

What should you do? 

Although the coronavirus can be seen as a tipping point for people wanting a different quality of life outside of city living, this may also be a temporary shift. 

With many home owners considering relocation to rural areas, loan officers should become familiar with specific loan programs. So, educate yourself on downpayment-assistance programs as well, which can aid your borrowers.

USDA loan lenders

The U.S. Department of Agriculture (USDA) provides loan guarantees for lender programs that are similar to those of the Federal Housing Administration (FHA). But, USDA loans are for buyers in eligible areas across the nation. Also, they include special underwriting criteria specific for rural communities. 

More than 22 million Americans live in manufactured homes. Also, there is growing demand for this affordable-housing. Fannie Mae and Freddie Mac each have financing programs for specially designated manufactured homes. The USDA offers loan programs for manufactured housing as well. 

If you’re not familiar with these speciality loans, you could partner with a loan officer who has real-world experience with USDA and FHA loans. Make it a goal to provide education on financing options for your clients, no matter what their circumstances are, and become a trusted USDA loan lender. 

Bottom line

City living isn’t going away any time soon. But, some homeowners may be second guessing their pricey downtown living spaces and looking elsewhere during this coronavirus crisis. 

Overall, the acceleration in innovation and the favorable rates for homebuyers will open doors for many new lending opportunities and USDA loan lenders, no matter the location.