Exploring the Timelines: How USDA Loans Impact Closing Times in the Finance World

October 14, 2023

Do USDA loans take longer to close?

When it comes to securing a home loan, borrowers often wonder about the time it takes for the loan to close. One type of loan that often comes up in this discussion is the USDA loan, which is backed by the United States Department of Agriculture (USDA). USDA loans are specifically designed to help low- to moderate-income borrowers in rural and suburban areas achieve homeownership. In this article, we will examine whether USDA loans take longer to close than other types of loans.

Understanding USDA Loans

Before delving into the closing process, it’s important to have a basic understanding of USDA loans. These loans are offered through the USDA’s Rural Development Guaranteed Housing Loan Program. They offer attractive features to borrowers, including 100% financing, low interest rates, and flexible credit requirements. USDA loans are designed to promote rural development and homeownership by providing affordable financing options to eligible borrowers.

The factors that affect closing time

The time it takes to close a loan can be affected by several factors, regardless of the type of loan. These factors include the complexity of the borrower’s financial situation, the lender’s workload, the loan officer’s efficiency, and the completeness and accuracy of the borrower’s documentation. While USDA loans do not inherently take longer to close, certain aspects of these loans can impact the timeline.

One factor that can potentially affect the closing time for USDA loans is the property appraisal process. USDA loans require an appraisal to determine the fair market value of the property being financed. Because USDA loans are primarily intended for rural and suburban areas, it can sometimes be difficult to find appraisers with expertise in these specific locations. As a result, the appraisal process may take longer than loans for properties in more urban areas.
Another factor that can contribute to potential delays in closing a USDA loan is the verification of the property’s eligibility. USDA loans have specific geographic and income eligibility requirements. The lender must ensure that the property being financed meets the USDA’s requirements. This verification process may require additional inspections or documentation, which can add time to the closing process.

Efficiently Navigate the USDA Loan Closing Process

While USDA loans may involve some unique factors that can impact closing time, there are steps borrowers can take to help streamline the process. First and foremost, it is critical to work with a knowledgeable and experienced loan officer who is well-versed in USDA loan requirements. A knowledgeable loan officer can guide borrowers through the necessary steps and ensure that all documents are properly prepared and submitted, minimizing potential delays.
To expedite the appraisal process, borrowers can proactively provide the loan officer with any information or documents that may help the appraiser, such as recent home improvements or relevant neighborhood data. In addition, borrowers can communicate with their loan officer and real estate agent to ensure the property meets USDA eligibility criteria and address any potential issues before they become major hurdles.

Bottom line

While USDA loans do not inherently take longer to close than other loan types, certain factors specific to the USDA loan program can potentially impact the timeline. These factors include the availability of appraisers with expertise in rural and suburban areas and the property eligibility verification process. By working with an experienced loan officer and proactively addressing any potential issues, borrowers can help ensure a smooth and timely closing process for their USDA loan. Remember, every loan situation is unique and individual circumstances can vary, so it’s always recommended to consult with a qualified mortgage professional for personalized advice and guidance.


Do USDA loans take longer to close?

Yes, USDA loans typically take longer to close compared to other types of loans.

What factors contribute to the longer closing time for USDA loans?

Several factors can contribute to the longer closing time for USDA loans. These include the need for additional documentation, stricter property eligibility requirements, and the involvement of multiple parties in the loan approval process.

Are there any specific documentation requirements that can delay the closing of a USDA loan?

Yes, USDA loans have specific documentation requirements that borrowers need to fulfill. These requirements may include providing income verification, proof of assets, and documentation related to the property being purchased. If any of these documents are missing or incomplete, it can cause delays in the loan closing process.

Does the property location affect the closing time for USDA loans?

Yes, the location of the property can impact the closing time for USDA loans. USDA loans are designed to promote rural development, so properties located in rural areas are eligible. However, the USDA has specific criteria for what is considered a rural area, and if the property is located in an area that does not meet these criteria, it can lead to delays in the loan closing process.

Are there any steps borrowers can take to expedite the closing of a USDA loan?

While the closing time for USDA loans is generally longer, there are steps borrowers can take to help expedite the process. These include ensuring all required documentation is complete and accurate, promptly responding to any requests for additional information from the lender, and working with a knowledgeable loan officer who is familiar with the USDA loan process.