What Is a USDA Mortgage?
A USDA mortgage is a home loan program backed by the U.S. Department of Agriculture (USDA), designed to make homeownership affordable for low-to-moderate-income buyers in eligible rural and suburban areas. With no down payment, low interest rates, and flexible credit requirements, USDA loans are an excellent choice for qualified borrowers who meet income and location guidelines.
Why Choose a USDA Home Loan?
USDA loans offer a range of unique benefits that make homeownership more attainable:
- $0 down payment required
- Competitive interest rates
- Reduced mortgage insurance costs
- Flexible credit guidelines
- Fixed-rate financing only
- Available for single-family primary residences only
Types of USDA Loan Programs
USDA Guaranteed Loan
The most common USDA loan, issued by approved private lenders and backed by the USDA. This option is ideal for most homebuyers looking to purchase a home in an eligible area with no down payment.
Ideal for: Moderate-income buyers who meet the USDA’s income and property location guidelines.
USDA Direct Loan (Section 502)
Issued directly by the USDA to very low- and low-income borrowers. These loans often feature subsidized interest rates and extended repayment terms (up to 38 years).
Ideal for: Buyers with limited income who may not qualify for traditional financing.
USDA Loan Eligibility
To qualify for a USDA mortgage, you must meet these basic requirements:
- Property location must be in a USDA-eligible rural or suburban area Check Property Eligibility
- Income limits based on area median income and household size (typically 115% or less of the median)
- Primary residence only (no second homes or investment properties)
- U.S. citizenship or legal residency
- Credit score of 620+ recommended (though lower scores may be considered with compensating factors)
- Tighter Debt to Income Ratio requirements – typically a max of 29/41 is allowed for automated eligibility.
USDA Loan Limits and Income Guidelines
- No set loan limit, but the amount you can borrow is based on your income, debts, and the home’s appraised value
- Income limits vary by location, household size, and loan program type
Is a USDA Loan Right for You?
If you’re looking for a zero-down payment mortgage, live or want to buy in a USDA-eligible rural or suburban area, and meet income guidelines, a USDA loan may be the perfect fit. It’s especially helpful for first-time homebuyers and families seeking affordable, long-term housing solutions.
Get Started with a USDA Home Loan Today
Our experienced mortgage team is here to help you determine your eligibility, find USDA-approved properties, and secure the financing that fits your goals.
Call us at 727-473-7734 to Pre-Qualify for a USDA Loan
