Loan Programs

USDA Loans

Zero down payment financing for eligible rural and suburban homebuyers. More areas qualify than you'd think.

What Is a USDA Loan?

USDA loans are mortgage loans guaranteed by the United States Department of Agriculture through their Rural Development program. The goal is simple: help moderate-income families achieve homeownership in eligible rural and suburban areas. The benefit? Zero down payment, one of only two loan programs (along with VA) that offers true 100% financing.

Here's what surprises most people: "rural" doesn't mean you need to live on a farm. Many suburban communities just outside major metros qualify for USDA eligibility. In Texas, there are USDA-eligible areas within reasonable commuting distance of Fort Worth, Austin, Houston, and other cities. The USDA eligibility map is more generous than most people expect.

Instead of PMI, USDA loans have a guarantee fee, 1% upfront (rolled into the loan) and 0.35% annual. That annual fee is significantly lower than FHA's MIP, making the monthly payment very competitive. Combined with zero down payment, USDA can be the most affordable path to homeownership if you meet the location and income requirements.

Key Benefits

Zero Down Payment

Buy a home without any down payment. The only money you need to bring is for closing costs, and sellers can contribute up to 6% toward those.

Low Guarantee Fee

The annual guarantee fee is just 0.35%, significantly lower than FHA's 0.55% MIP. On a $250,000 loan, that's over $40/month in savings.

Flexible Credit

USDA has no official minimum credit score, though most lenders prefer 640+. If your credit is lower, I can shop lenders who work with USDA borrowers in the 580-639 range.

Below-Market Rates

Because the government guarantees the loan, USDA rates are typically among the lowest available, often comparable to or better than conventional rates.

Requirements

  • ✓ Location: Property must be in a USDA-eligible area. I can check any address for you instantly.
  • ✓ Income Limits: Household income cannot exceed 115% of the area median income. Limits vary by county and family size.
  • ✓ Credit Score: Most lenders require 640+. Some flexibility available with compensating factors.
  • ✓ Guarantee Fee: 1% upfront (financed) + 0.35% annual fee.
  • ✓ Property: Must be a primary residence. No investment properties, second homes, or income-producing farms.

Who Is This For?

USDA loans are built for buyers who want to live in suburban or rural communities and have moderate income. They're great for:

  • → First-time buyers in eligible areas with limited savings for a down payment
  • → Families buying in suburban communities outside major metros
  • → Buyers who don't qualify for VA but want zero-down financing
  • → Households earning under 115% of the area median income
  • → Anyone looking for the lowest possible monthly payment on a home purchase

Frequently Asked Questions

USDA loans are available in rural and suburban areas, and the definition is broader than you might think. Many areas just outside major cities qualify. I can check specific addresses for eligibility.
Yes, USDA loans have household income limits that vary by county and family size, typically around 115% of the area median income.
Correct: USDA loans offer 100% financing with no down payment. There is a guarantee fee (similar to PMI) that is rolled into the loan.
On USDA guaranteed loans, the seller can usually contribute toward your allowable closing costs and prepaid expenses, often discussed as up to 6% of the purchase price when the contract is structured correctly. The money has to go toward USDA-eligible costs, and it cannot replace any borrower funds USDA or the lender requires you to bring. I will match what we negotiate with the program rules and your Loan Estimate so everything clears underwriting and closing.

Want to check USDA eligibility?

Send me an address and I'll look it up in minutes. Or apply online to get started.

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USDA Property Eligibility map: United States map with address search and shaded eligibility areas Open USDA eligibility site
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