USDA

Buyers in qualifying rural/suburban areas

Zero down payment for eligible rural and suburban properties. Income-based qualification with favorable terms for families in qualifying areas.

Program Overview

How USDA Loans Work

USDA loans are zero-down-payment mortgages guaranteed by the United States Department of Agriculture through its Rural Development program. Designed to promote homeownership in less densely populated areas, USDA loans offer some of the most favorable terms available for eligible buyers.

A primary benefit of a USDA loan is 100% financing with no down payment required. Combined with below-market interest rates and lower mortgage insurance costs compared to FHA, USDA loans can help reduce both your upfront and monthly costs of homeownership.

USDA eligibility is based on two factors: property location and household income. The property must be located in a USDA-eligible area, which includes most of the country outside major metropolitan centers. Many suburban areas that feel far from "rural" still qualify. Household income must be at or below 115% of the area median income.

USDA mortgage insurance is more affordable than FHA. The upfront guarantee fee is 1.0% of the loan amount (financeable), and the annual fee is just 0.35% of the loan balance, paid monthly. This lower insurance cost generally results in a lower monthly payment compared to an FHA loan of the same size.

Key Features

Zero down payment required
Potentially below-market interest rates
Lower mortgage insurance than FHA (0.35% annual vs. 0.55%)
No maximum purchase price (must pass appraisal)
Closing costs can be financed or paid by the seller
30-year fixed-rate term

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The Process

How It Works

Check Eligibility

We verify that your target area is USDA-eligible and that your household income falls within the program limits. The USDA eligibility map is available online and we can check any address quickly.

Get Pre-Approved

We review your income, credit, and debt profile to confirm qualification. USDA loans have specific income calculation rules that include all adult household members, not just the borrowers.

Submit to USDA for Conditional Commitment

After lender underwriting, your file is submitted to the USDA for their review and conditional commitment. This adds a step compared to other loan types but our team manages the timeline proactively.

Close on Your Home

Once the USDA issues their commitment and all conditions are cleared, you close on your new home with zero money down.

Ideal Borrower

Who This Program Is For

USDA loans are designed for moderate-income families who want to buy in eligible suburban or rural areas without saving for a large down payment.

First-time buyers in suburban or rural communities

Families with moderate income and limited savings for a down payment

Buyers in areas outside major metro centers (many suburbs qualify)

Borrowers who want the lowest possible monthly payment

Military families stationed near bases in rural areas (if not using VA)

Run the Numbers

Use our calculator to explore payment scenarios, compare options, and see how a usda loan could fit your financial plan.

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Common Questions

USDA FAQ

The USDA provides an online eligibility map at rd.usda.gov. You can enter any address and see immediately if it falls within an eligible area. Many suburban communities and small cities qualify. Your loan officer can check any address for you as well.

USDA income limits are based on 115% of the area median income (AMI) for your county. They vary significantly by location and household size. For example, a family of four in one county may qualify with a household income up to $110,000 while another county may allow $130,000+. We can look up your specific limit.

USDA loans can be used to purchase existing homes, new construction, and even certain manufactured homes. The property must be your primary residence and located in an eligible area. Investment properties and second homes are not eligible.

The USDA does not set a strict minimum credit score. Most lenders require at least a 640 FICO for automated underwriting approval. Borrowers with scores below 640 may still qualify through manual underwriting, which involves a more detailed review of your credit history.

Ready to Explore USDA Loans?

Let our team walk you through the details, run the numbers for your situation, and help you decide if this is the right program for your goals.

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