USDA Loans
For rural and suburban homebuyers, our USDA loan expertise offers a path to zero-down financing with favorable terms. We'll help determine your eligibility and maximize the benefits of this often-overlooked program.
USDA loans are government-backed mortgage loans guaranteed by the United States Department of Agriculture, designed to promote homeownership in eligible rural and suburban areas. These loans are part of the USDA Rural Development program, which aims to improve the economy and quality of life in rural America.
Key Features and Benefits
🚀Location Requirements
Properties must be located in USDA-eligible rural or suburban areas. Many suburbs and less densely populated regions qualify, covering approximately 97% of the U.S. geographic area.
🚀Income Limits
Borrowers must meet household income limits, which vary by location and household size. Generally, household income cannot exceed 115% of the area median income.
🚀Primary Residence
The property must be used as the borrower's primary residence, not as a vacation home or investment property.
🚀Credit Requirements
A minimum credit score of 640 is typically required for automated approval through the Guaranteed Underwriting System (GUS). Manual underwriting may be available for those with lower scores or non-traditional credit histories
🚀No Existing Property Ownership
Borrowers must not own adequate housing elsewhere. This is a fundamental eligibility requirement - potential borrowers cannot own other real estate at the time of closing on a USDA loan.
🚀Debt-to Income Ratios
USDA loans have stricter requirements on debt-to-income ratios than some other loan types, typically preferring a front-end ratio of 29% and back-end ratio of 41%, though exceptions can be made with compensating factors.
🚀Property Standards
Homes must meet certain condition and safety standards, similar to FHA property requirements, and must be modest in size and design for the area.
👉🏻USDA Loans Are Perfect For First Time Homebuyers
💡Zero Down Payment Requirement
USDA loans offer 100% financing, eliminating the need for a down payment, which is often the biggest hurdle for first-time buyers.
💡Eligible Closing Costs Assistance
USDA loans allow sellers to contribute up to 6% toward closing costs, reducing upfront costs
💡Lower Mortgage Insurance
The mortgage insurance premium on USDA loans is significantly lower than FHA loans—typically 0.35% annually compared to FHA's 0.55% or higher, resulting in lower monthly payments.
💡Streamlined Process for Qualified Buyers
For borrowers with good credit (640+), the USDA's automated underwriting system (GUS) provides a streamlined approval process, making the path to homeownership more straightforward and predictable.
💡Competitive Interest Rates
USDA loans typically offer interest rates that are at or below market rates, similar to other government-backed programs like FHA, making monthly payments more affordable.