USDA Loans: $0 Down in Rural and Suburban Areas

Buying in an eligible area? USDA loans offer no down payment, low rates, and flexible credit for qualified buyers.

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What Is a USDA Loan?

USDA loans are mortgages backed by the United States Department of Agriculture, designed to promote homeownership in rural and suburban areas.

Despite the name, USDA loans aren't just for farms, many suburban areas qualify, including towns near major cities.

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Key Benefits

Why Choose a USDA Loan?

$0 Down Payment

- Buy a home with no money down if you meet income and property requirements.

Low Interest Rates

Competitive rates, often lower than conventional loans.

Flexible Credit

Accepts credit scores as low as 640, with flexibility for credit challenges.

Low Mortgage Insurance

USDA guarantee fee is typically lower than FHA's mortgage insurance.

100% Financing

Finance the entire purchase price with no down payment required.

USDA Loan Eligibility

Property Location

Must be in a USDA-eligible rural or suburban area

Income Limits

Household income must be below USDA limits for your area (typically 115% of area median income)

Credit Score

Minimum 640 credit score preferred

Primary Residence

Property must be your primary residence (no investment properties or vacation homes)

Citizenship

Must be U.S. citizen, U.S. non-citizen national, or qualified alien

Understanding USDA Fees

USDA loans require two fees:

Upfront Guarantee Fee

1% of the loan amount, paid at closing
Can be rolled into your loan
Example: $300,000 loan = $3,000 upfront fee

Annual Fee

0.35% of the loan balance annually, paid monthly
Example: $300,000 loan × 0.35% = $1,050/year = $87.50/month

Note: USDA fees are typically lower than FHA's mortgage insurance.

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USDA Income Requirements

USDA loans have maximum income limits based on your location and household size. Limits are set at roughly 115% of the area median income.

Example Income Limits (varies by area):

1-4 person household: $103,500
5-8 person household: $136,600

Income Included:

Wages and salaries
Self-employment income
Social Security, pensions, retirement
Investment income
Child support, alimony

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How to Get a USDA Loan

Step 1

Check Eligibility

Confirm property location and income qualify

Step 2

Get Pre-Approved

We'll review your finances and pre-approve you for a VA loan.

Step 3

Find an Eligible Home

Property must be in USDA-eligible area and meet standards

Step 4

USDA Appraisal

Required to confirm value and property condition

Step 5

USDA Approval

Loan goes through USDA underwriting

Step 6

Close

Sign documents and move in (whole process takes 30-45 days)

USDA Loan FAQs

Yes! Many suburban areas qualify, especially those outside city limits or in smaller communities.

Varies by location and household size. Typically around 115% of area median income. Check your county's limits.

No, USDA loans are for primary residences only.

No, USDA accepts 640+ credit scores, with flexibility for compensating factors.

USDA underwriting can take longer than conventional loans; budget 30-45 days minimum.

Yes, USDA offers streamline refinance options for existing USDA borrowers.

Buy With $0 Down in Your Area

Check if your area qualifies and see if you're eligible for a USDA loan.