By the way I heard (rumor not in writing) that USDA was removing the insulation requirement on underwriting because a lot of appraisers were not able to measure the insulation in the walls. Here is a link to the USDA requirements sheet that is the appraiser check list.
It sounds like you've done some research on the loan program, but keep in mind it is income and location restricted. Here is the website to search for property eligibility. http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do