USDA Home Loans

Zero-Down Financing for Rural & Suburban Buyers

Looking for a mortgage that combines 100 % financing, competitive rates, and flexible credit guidelines? A USDA home loan—also called a USDA Rural Development loan—could be your perfect match.

What Is a USDA Home Loan?

A USDA loan is a government-backed mortgage for low- to moderate-income households buying a primary residence in an eligible rural or suburban area. Because the U.S. Department of Agriculture guarantees a portion of the mortgage, lenders can offer:

  • No down payment required – finance up to 100 % of the purchase price
  • Below-market fixed interest rates
  • Reduced mortgage insurance costs (called guarantee fees) compared with FHA financing

Top USDA Loan Benefits

BenefitWhy It Matters
Zero down paymentKeep your savings for moving costs or emergency funds
Low upfront guarantee fee (1 %)Can be rolled into the loan amount
Low annual fee (0.35 %)Typically costs less than FHA MIP
Flexible credit guidelinesMany lenders approve scores starting around 620
Fixed-rate terms onlyPredictable monthly payments for the life of the loan

USDA Loan Eligibility Requirements

CategoryStandard Guideline*
Income limit≤ $112,450 for households of 1–4; ≤ $148,450 for 5+ (most counties, 2025)
LocationHome must sit in a USDA-eligible rural or suburban area
Credit scoreLender overlays often start at 620
Debt-to-incomeGenerally ≤ 41–43 % (may vary by lender)
Primary residenceBorrower must occupy the property within 60 days of closing

*Guidelines may vary by lender and county.

Understanding USDA Guarantee Fees

  • Up-front guarantee fee: 1 % of the base loan amount, paid at closing or rolled into the mortgage.
  • Annual fee: 0.35 % of the outstanding balance, collected monthly and recalculated each year. These fees keep the program “subsidy-neutral” without burdening taxpayers

USDA Loan Income Limits for 2025

  • $112,450 → Households of 1–4 members
  • $148,450 → Households of 5–8 members
    High-cost counties may allow higher caps. Limits are based on total household income, not just applicants on the loan

Property Eligibility Map

Use the USDA’s online map to confirm that the address is in an approved zone. Most small towns and many outer-ring suburbs qualify

Step-by-Step USDA Loan Process

  1. Get pre-qualified with a USDA-approved lender.
  2. Verify property eligibility and gather income/asset documents.
  3. Submit full application and order appraisal (value plus USDA property standards).
  4. Underwriting & USDA review—lender signs off, then USDA issues the final guarantee.
  5. Close & move in!

USDA Loan vs Conventional Loan

FeatureUSDA LoanConventional Loan
Down Payment0%3 – 20%
Mortgage Insurance0.35% annual feePMI until 20% equity
Location LimitsRural/Suburban onlyNationwide
Income LimitsYes (115% of AMI)None
Ideal BorrowerModerate income, limited savingsStrong credit, larger down payment

USDA Loan FAQs

What is a USDA loan and who qualifies?

A USDA loan is a government-backed mortgage for eligible rural and suburban homebuyers who meet certain income limits. It’s designed to promote homeownership in less densely populated areas. You don’t have to be a farmer—just meet location and income requirements.

Do USDA loans require a down payment?

No! One of the biggest benefits of a USDA loan is 100% financing—which means no down payment is required. This makes it an excellent option for buyers who qualify but may not have significant savings upfront.

Are there income limits for USDA loan eligibility?

Yes, USDA loans are intended for low-to-moderate income households. The exact limit depends on your location, household size, and local cost of living. We can help you determine if you qualify based on your situation.

What types of properties are eligible for USDA financing?

USDA loans are typically available for single-family homes located in eligible rural or suburban areas. The home must be your primary residence and meet USDA property condition standards. We’ll guide you through the process of finding qualifying homes.

Looking to Go Rural?

Salute Mortgage’s USDA specialists will confirm your eligibility, crunch the numbers, and guide you from application to closing—all with a streamlined digital experience.

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