True zero-down financing!

USDA Rural Development Home Loan

The United States Department of Agriculture, or USDA offers considerable benefits for those wishing to purchase a home in rural and mostly rural areas. This program allows you to purchase a home with true zero-down financing so you can keep your cash in the bank.

The USDA loan’s purpose is to provide affordable homeownership opportunities to low-to-moderate income households to stimulate economic growth in rural and suburban communities throughout the United States.

What is a USDA Loan?

A USDA loan is one that follows the guidelines set forth by the United States Department of Agriculture. The program is designed to help those who wish to buy and finance an owner-occupied home in rural or semi-rural areas, where conventional financing would be difficult to obtain for the very same property.

Borrowers apply directly with a USDA approved mortgage lender. USDA loans require no down payment and are offered as a 30-year fixed rate mortgage, the most popular mortgage term in today’s marketplace.

97 percent of the U.S. is eligible for a USDA Loan!

Eligible Areas

USDA loans are limited to certain rural areas. Generally, according to USDA guidelines, it includes any areas with a population of less than 35,000. In fact, an estimated 97 percent of the U.S. is eligible for USDA lending. To see if the area you are shopping for a home in qualifies, visit the USDA Income and Property Eligibility site.

Find out if you qualify today by taking our short USDA pre-qualification quiz. 

*Programs not available in all areas. Additional terms and conditions may apply.

Possible USDA Benefits

  • Not limited to first time homebuyers
  • No down payment
  • 1% USDA required guarantee fee can be financed
  • Seller may contribute to buyer’s closing cost

USDA Qualifications

  • Property must be located in an eligible designated rural area
  • Brand new homes or existing properties are eligible
  • Annual income must meet eligibility guidelines
  • No cash reserve requirement

Income Limits

To be eligible for a USDA home loan, there are specific household income limitations that must be followed. The USDA loan is designed to assist those considered having low to moderate income. Income is verified with most recent tax returns, most recent paycheck stubs and a year-to-date profit and loss statement for self-employed borrowers.

These limits will vary but in most areas of the country, for 1-4 member households, the limit is $82,700 and with 5-8 member households the limit is $109,150. In areas deemed “high cost” income limits can be higher, as much as $276,100 for a 5-8-member household. Your loan officer can walk you through income qualifications.

picture of home in a usda eligible area

USDA Property Eligibility

The property must be owner-occupied and not used for a rental or investment property. The property must be located in an area currently approved by the United States Census Bureau. These areas are identified after the Census Bureau completes its census every 10 years. Due to the extended periods when the census is taken, homes may be in an eligible area even though the location looks nothing like rural.

Potential buyers should contact a loan officer with USDA experience to help research if the property meets USDA guidelines.
It may be surprising to many, but even though the USDA is limited to certain parts of the country, there are more areas where the USDA loan can be used than not.

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