USDA loans offer 100% financing with no down payment for homes in eligible rural and suburban areas. With lower mortgage insurance than FHA and competitive rates, USDA is one of the best deals available for eligible buyers.
Use the USDA property eligibility map at eligibility.sc.egov.usda.gov. Enter the property address to see if it's in an eligible area. Many suburban areas and small towns qualify—it's worth checking even if you don't think of the area as 'rural.'
Income limits are 115% of the area median income and vary by county and household size. For a family of 4, limits range from about $90,000 to $150,000+ depending on location. Use the USDA income eligibility tool to check your specific situation.
USDA charges a 1% upfront guarantee fee (usually financed into the loan) and a 0.35% annual fee paid monthly. This is significantly cheaper than FHA's 1.75% upfront and 0.55% annual—saving you money over the life of the loan.
For automated underwriting (GUS), most lenders require 640+. Below 640, you'll need manual underwriting, which some lenders don't offer. With strong compensating factors, some borrowers with 580-640 can qualify through manual underwriting.
Total household income includes all adult members (18+), even non-borrowers. However, there are deductions for dependents, childcare, medical expenses, and more. Only borrower income is used for qualification—total household determines eligibility.
Yes! USDA finances manufactured homes if they're on a permanent foundation, meet HUD standards, and are classified as real property. The home must be new or have been previously financed with a USDA loan.
USDA loans require approval from both the lender and USDA, typically adding 1-2 weeks to the process. Expect 30-45 days from application to closing, sometimes longer during busy periods. Start early and have patience.
Yes! USDA offers construction-to-permanent loans in eligible areas. You'll need an approved builder and plans. Single-close construction loans are available where you apply once and convert to permanent financing after construction.
Yes! Sellers can contribute up to 6% of the purchase price toward your closing costs. This can potentially cover all your out-of-pocket costs, making USDA a true zero-money-down option.
Similar to FHA and VA streamlines, USDA offers simplified refinancing for existing USDA borrowers. Requirements include being current on your loan, demonstrating a net tangible benefit (lower payment or rate), and the property maintaining eligibility.
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Information provided is for educational purposes only and is not a commitment to lend. All loans subject to underwriting approval. Rates and terms subject to change. Equal Housing Lender. Equal Housing Opportunity.