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USDA Loan Programs

Consumers that live in a rural region of the United States may be eligible for a USDA loan program. First time home buyers that are looking to reside in a rural area should strongly consider the USDA. These loans have no down payment requirements, so borrowers can benefit by saving the money they had put aside for the down-payment or deposit. Please complete the form and we'll match your request with USDA approved mortgage companies at no cost.

How to Get Home Loans in Rural Area with the USDA

Do you feel more at home being surrounded by farmland than by houses and asphalt? If so, purchasing a home with a USDA mortgage loan could be for you. The US Department of Agriculture mortgage program is one of the least-known mortgage assistance options on the market.

In its Rural Development program, the USDA last year invested nearly $20 billion to assist more than 140,000 people but and improve their homes. The purpose of this fantastic program is to boost the economy and quality of life in rural parts of the US. The program has low interest rates and no down payments are available. You could be surprised at how accessible this mortgage assistance program is for many home buyers today. With all of the expansion in "rural America", USDA home loans have been soaring popularity because it is such a great lending product for people living in the country.

How the Program Works

The USDA offers three home loan programs for your consideration:

  • Loan guarantees: USDA will guarantee a mortgage that is issued by a lender. It is similar to how the FHA and VA back loans. This allows you to obtain a low interest rate, in some cases without putting any money down. If you put down little money, note that mortgage insurance is required.
  • Direct mortgage loans: These loans are issued directly by USAD. These loans are suitable for people who have low or very low income. Subsidies are available and interest rates can be 1%.
  • Home improvement loans backed by USDA: These can be loans or financial awards that allow homeowners to repair their homes, up to $27,500 in assistance.

Program Benefits

  • 100% financing is available. This one of the few zero down home loan options for non-military borrowers available today.
  • Guarantee fee can be rolled into the loan, so 102% financing is possible
  • Many property types are available, such as new and existing homes, modular homes, planned unit developments, condos, and manufactured houses.
  • Closing costs and lender fees may be rolled into the mortgage
  • Repair costs can be included in the USDA loan

How to Quality for a USDA Mortgage

Income limits to qualify for a mortgage loan from USDA will vary upon the area and how large your family is. To determine the loan guarantee income limit for your county, check this link at USDA.

USDA will guarantee home loans for only primary residences. Other requirements are as follows:

  • Citizen of the USA or permanent resident
  • A monthly mortgage payment, which includes taxes, principal, interest, insurance, that is 29% of less of your income each month. Any other monthly debt payments you make may not go over 41% of your income. Note that USDA will consider you for a higher debt ratio if your credit score is above 660.
  • Steady income for at least the last 24 months.
  • A decent credit history: no accounts with collections in the last year. If you can show that your credit was negatively affected due to job loss or other things outside your control, you might still qualify.

People with FICO scores of 620 or more will receive faster financing. If your credit score is under 580, you will have to deal with tougher underwriting standards. If you have no credit history at all, you may still qualify with other credit references, such as utility payments and rental payments.

USDA will usually have a limit of 115% of your area's median income, so if you make more than that, you probably are not eligible for the program.

How the USDA Home Loan Works

USDA prioritizes mortgages to applicants that have the most need. This means a family that:

  • Does not have decent, safe and sanitary housing
  • Is not able to get a home loan from a conventional lender
  • Has an adjusted income that is below the low income limit for the county in which they reside

USDA will normally issue direct loans for homes that have 1800 square feet or less, with a market value that is under the loan limit for the area. That can vary based upon where you live. In some areas, home loans may be as high as $500,000, such as in CA and HI. In parts of rural America, prices can be as low as $100,000. A loan limit of $217,000 is a typical limit in many parts of the US.

Areas That Are Eligible

Most major metropolitan areas are normally excluded from the USDA program. However, some suburbs may qualify. Any rural area in the USA is eligible.

Why You Should Try to Get a USDA Loan Now

The USDA decides which areas qualify based upon US census data, and guess what? The Department of Agriculture has not updated the map since 2000! Much growth in many areas of the US have happened in 15 years. Many areas that were once thought to be rural are now suburbs.

One study found recently that 97% of the country's land is eligible for a USDA loan. So that means around one in three people live in areas that were eligible for the program when the report was published.

However, the USDA is going to update the map soon, and this will make 8 million people or more ineligible for the program.

The Bottom Line with USDA Financing

The USDA mortgage loan program is a great option for lower income Americans in rural areas. Strongly consider this program and talk to your mortgage lender about it right away.



First Time Home does not offer no interest loans, grants or down payment assistance for first time home buyers. is a website that offers information about residential real estate financing and does not guarantee rates or pre-qualification directly or indirectly through representatives or agents. provides a news and information service by offering editorial content related to the mortgage industry.

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