Exploring USDA
The U.S. Department of Agriculture (USDA) offers low interest, 100% mortgage financing in order to both help low-to-moderate income households have a chance at homeownership and to help spark growth in low-populated areas. USDA loans are typically for people who do not qualify for an FHA or conventional loan. There are also limits on how much money a borrower can earn in order to deter people who do not NEED a USDA loan to qualify for a home from applying. The USDA also has limits on which properties are eligible. You can find a link to both the USDA income limits and the eligibility map below. Some of the benefits that come with USDA loans include no down payment, no maximum purchase price, and the use of both gift and grant funds are allowed.
Types of USDA Loans
- USDA Guaranteed Loan
- USDA Direct Loan
Requirements:
| USDA Guaranteed | USDA Direct | |
|---|---|---|
| Down Payment | 0% | 0% |
| Debt to Income Ratio: | 41% | 41% |
| Credit Score: | 640+ | 640+ (can be lower in certain scenarios) |
| Income Limit: | Not to exceed 115% of AMI | Limits vary by country |
| Property Location: | Rural Area | Rural area (Population of 35,000 or less) |
| Property Type: | Primary residence (no in-ground swimming pool) | Primary residence (no in-ground swimming pool) |
| Home Size: | Modest for area | Modest for area |
| Property Size: | Typical for area | Small enough to not be sub-divided into smaller parcels |
USDA Loan Limit
USDA loan limits are area specific. Search area limits here: RD-SFHAreaLoanLimitMap.pdf (usda.gov)
USDA loans are low-interest mortgages with zero down payments designed for low-income Americans who don’t have good enough credit to qualify for traditional mortgages. You must use a USDA loan to buy a home in a designated area that covers several rural and suburban locations.
USDA Property Eligibility
In order to be USDA eligible, a property must be located in a rural or suburban area, typically with a population of less than 50,000. You can look up the USDA property eligibility map at: USDA Property Eligibility Map
USDA County Income Limits
Income limits vary by county. You can find your areas income limits at: USDA County Income Limits