USDA Loans - What is a USDA Loan?

USDA Guaranteed Loan is the best home loan next to VA Loans. Offering 100% financing with no money down, now you can purchase a home without having to save up for a hefty down payment.

Conventional loans: 3%, 5% and 20% down
FHA loans: 3.5% down
VA loans: 0% down
USDA loans: $0 down

VA Loans are solely for military personnel, and civilians are not able to utilize this loan. You don’t have to be in the military to get 100% financing. The USDA Loan is available to anyone that meets income and credit requirements.

USDA, or the United States Department of Agriculture, designed this loan to pull the population out of large metropolitan cites and into surrounding areas. USDA eligible properties are typically located outside of city limits, in suburbs or rural areas. The USDA Guaranteed Loan is not meant to finance farms rather they are geared towards the standard single-family home.

This zero-down, 100% financing home loan has income limits, and property eligibility requirements, however you don’t have to be a first time home buyer to take advantage of this great home mortgage option.

Another USDA Loan advantage is that the USDA Loan's mortgage insurance fee is just 0.35% monthly – nearly half of what is charged on a conventional loan and a quarter of what is charged on FHA. There are no loan amount limits like FHA, instead the applicant’s income determines the maximum loan size. USDA Loans also allow for the buyer to roll their closing costs into the mortgage up to 100% of the appraised value of the home. 

How to Apply for a USDA Loan

  1. Apply with our USDA loan specialist
  2. See if you Qualify by meeting income and credit requirements 
  3. Get Pre-Approved by providing tax returns, W2s, pay stubs, employment history and bank statements 
  4. Choose a home in a USDA eligible area
  5. Make an offer on your USDA home

» More: Check your USDA Loan eligibility.

USDA Loan Benefits

Possibly the most notable benefit of the USDA Loan is no required down payment for eligible home buyers. 100% financing and closing costs can be rolled into loan up to 100% of appraised value. 

USDA Loan eligibility requirements cover the following: credit worthiness of applicant, debt that appears on credit report, income, 2 years history of employment, and number of people in household.

Click Here to see if you qualify.

The USDA Loan can be used in USDA designated areas. These areas are located all across the country, in both rural and suburban areas.

Click Here to check property eligibility. Scroll down to see map at the bottom of page.

Income limits vary per county and number of individuals in household. Check with our loan specialist to see if you are within the income limits for your county and if you qualify for income deductions.

Continued Learning:

USDA Loan Property Eligibility

USDA Loan qualification standards vary by property location, which is why it is best to contact a USDA Loan specialist to help determine if you are eligible. As for the general requirements, a property must be:

  • Located in what the USDA deems as a eligible rural area (outside city limits)
  • A home buyer's primary residence
  • Home is safe and structurally sound
  • Property must pass an inspection by a state-licensed inspector
  • Single family residence, town home or condo may also qualify

Click Here to determine if a home is eligible, scroll down to map at the bottom of page.

USDA Loan Credit and Income Eligibility 

The USDA Loan guaranteed by the USDA and funded by USDA-approved lenders. Through the USDA’s guarantee, homebuyers that may not have qualified for a conventional mortgage have the opportunity to secure home financing through the USDA Loan. In order to be eligible for the USDA Loan, prospective borrowers must meet the following requirements:

  • Must be willing and able to repay the loan
  • Must provide proof of reliable income, including two years of tax returns and W2s
  • Must display a positive history of paying debt obligations or be 2 years outside of bankruptcy
  • Must have a monthly payment that is less than 29% of your monthly income
  • Must have a debt-to-income (DTI) ratio not exceeding 41% of your income
  • Must have a moderate or low income, not exceeding 115% of the typical income for the area
  • Must be a current U.S. citizen or permanent resident with a Green Card

» More: Check to see if you meet the USDA's credit and income requirements.

Getting Started with a USDA Loan is Easy

Starting the USDA Loan process is much like any other mortgage. Borrowers will need to provide personal information such as tax returns, W2s, pay stubs and employment history.

To apply for a USDA Guaranteed Loan, get started with a USDA specialist. For a USDA direct loan or grant, contact your state's USDA office.

USDA Loan Education

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Representatives Specializing in USDA Loans is a private company, not a government agency