- USDA Loan
USDA loans allow people to buy a home in a qualifying rural or suburban area for 0% down if they meet income guidelines.
Who USDA Loans Are Best For
USDA loans help make owning a home more affordable for those living in eligible rural and suburban areas and with household incomes within the USDA limits. Read more about other benefits below.
How USDA Loans Work
USDA loans, also known as rural development loans, are an affordable mortgage option for buying a home in a qualifying rural or suburban area.
They’re backed by the U.S. Department of Agriculture, making them more accessible than other loan options.
You can get a USDA loan as a 30-year fixed-rate mortgage.
If you already have a USDA loan, you can refinance it into a new USDA loan; however, you can't refinance with a USDA loan if you currently have a different loan type.
What You’ll Need To Qualify For A USDA Loan
- A minimum FICO ® Score of 640.
- An eligible property – the home you want to buy or refinance must be in an eligible rural or suburban area. Find out if your property is eligible.
- A household income under the limit set by the USDA for the area where you want to buy a home. Check your income eligibility with the USDA.
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USDA Loan Benefits
- You can qualify with a credit score as low as 640.
- USDA loans require no down payment, unlike FHA and conventional loans.
- The USDA monthly guarantee fee is lower than FHA monthly mortgage insurance in most cases, and you may be able to roll these fees into your loan.
- You may be able to roll your closing costs into your loan.
- If you already have a USDA loan, you can refinance it into a new USDA loan.
USDA Property Requirements
- The home must be your primary home, not a vacation home or income property.
- The property can't be a working farm.
- Your home appraisal must show the condition of the home meets USDA standards, including:
- The water, electrical, heating and cooling systems must be up to date and functional.
- The foundation and house need to be structurally sound.
- The property must be accessible from a paved or all-weather road.
Recommended Next Steps
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