Loan option
USDA loans
USDA Rural Development guaranteed loans allow eligible buyers to purchase in designated areas with no down payment. Eligibility has two separate tests: the property's location and the household's income.
How it works
How USDA loans work
The loan is made by an approved lender and guaranteed by USDA Rural Development. As with FHA and VA, you apply through a lender rather than through the agency.
The property has to be in an area USDA designates as eligible. Eligible areas are not only remote countryside; parts of the outskirts of Florida metropolitan areas qualify, and designations are revised over time. The only reliable way to check an address is USDA's own eligibility lookup.
There is also a household income limit, which varies by county and household size and is published by USDA. Both tests have to be satisfied: an eligible property does not help if household income is over the limit, and vice versa.
USDA guaranteed loans carry an upfront guarantee fee and an annual fee, which function similarly to mortgage insurance on other programs.
What to weigh up
- No website claim, including this one, can establish that a property or a household is USDA-eligible. Only USDA's lookup and the lender's verification can.
- Area designations and income limits are revised, so an answer from a previous year may no longer hold.
- The program is for owner-occupied primary residences.
Set by the lender, not by us
These vary between lenders and change over time. Nothing on this page is a quote, an approval, or a commitment to lend.
- Whether the lender participates in USDA guaranteed lending at all
- Minimum credit score and debt-to-income treatment
- Processing timelines, which can be affected by agency review
Nothing on this page is a rate quote, an approval, or a commitment to lend. Figures and requirements change, and they depend on your file.
Terms used on this page
- Underwriting
- The lender's assessment of whether to make the loan: the borrower, the property, the documentation and the risk, measured against the program's guidelines and the lender's own overlays.No mortgage program skips underwriting. Programs described as "no income verification" change what is documented, not whether the file is reviewed.
- Cash to close
- The total funds you need at closing: down payment, closing costs, prepaid items such as taxes and insurance, and any escrow set-up.It is usually larger than the down payment alone, and it is the figure worth planning around.
Questions about this program
- How do I know whether a property is USDA-eligible?
- Check the address in USDA's property eligibility lookup, then have the lender verify it. Eligibility is determined by USDA's designations, not by a general description of an area.
- Is there really no down payment?
- USDA guaranteed loans allow 100% financing of the purchase price for eligible borrowers and properties. You should still plan for closing costs and any prepaid items, which are separate from the down payment.
Official sources
Program rules are set by these organizations and are updated periodically. Where this page and an official source disagree, the official source is correct.
- Single Family Housing programs (opens in a new tab) — USDA Rural Development
- Property and income eligibility lookup (opens in a new tab) — USDA Rural Development
- Explore loan options (opens in a new tab) — Consumer Financial Protection Bureau
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Talk it through before you start shopping
Bring your situation, not your paperwork. A first conversation is about which programs actually fit and what the numbers look like — no documents, no credit pull, no commitment.