What types of properties are eligible for the USDA housing loan?

The eligibility of properties for the USDA housing loan centers on supporting homeownership in rural areas and small towns. The correct answer highlights that new or existing homes located in designated rural areas qualify for this program. This aim aligns with the USDA's mission to enhance the quality of life in rural America by providing reliable access to mortgage financing.

USDA loans are specifically tailored for residential properties, which can include single-family homes, townhouses, and planned unit developments, as long as they meet certain conditions regarding location and structure type. The property must primarily be used as your primary residence and must fall within USDA-designated rural areas, which often extend beyond what many consider "rural."

In contrast, the other options indicate types of properties or locations that do not align with the core purpose of USDA loans. Commercial properties, for instance, are not eligible for personal housing financing intended for individual homeowners. Similarly, while new construction homes can be eligible, the limitation to "new construction only" does not consider the existing homes that can also qualify. Lastly, the mention of properties in urban areas contradicts the USDA program’s focus on rural development, which is essential to understanding the loan's requirements and objectives.