USDA Loans
Zero down financing for eligible buyers in qualified rural and suburban areas.
A USDA Guaranteed loan is backed by the U.S. Department of Agriculture and is one of the only remaining true zero down payment programs for buyers who are not Veterans.
Eligibility is based on two things: the property must sit in a USDA eligible area, and your total household income must fall under the county limit for your household size. Many suburban neighborhoods that do not feel rural still qualify.
How USDA financing works
USDA guarantees a portion of the loan, which allows lenders to finance 100 percent of the purchase price. In exchange, you pay an upfront guarantee fee that can be financed into the loan and a smaller annual fee collected monthly.
- Seller paid closing costs are allowed
- Gift funds are permitted for closing costs
- The appraised value can support financed closing costs in some cases
Eligibility checks we run first
Before you fall in love with a house, we confirm the address on the USDA eligibility map and run your household income against the county limit. Income from all adult household members counts toward the limit, even if they are not on the loan.
Costs to plan for
With no down payment, the main out of pocket items are earnest money, the appraisal, and any prepaid taxes and insurance. Closing costs often end up largely covered through seller credits.
Documents to gather
USDA files are documented like other agency loans, with an added income review for the whole household.
- Last 30 days of pay stubs and two years of W-2s
- Two months of bank statements
- Income documentation for all adult household members
- Photo ID for each borrower
Advantages
- No down payment required
- Competitive fixed rates
- Lower monthly fee than FHA mortgage insurance
- Seller credits allowed toward closing costs
Things to consider
- Property must be in an eligible area
- Household income limits apply
- Primary residence only
- Guarantee fees are part of the cost
Common questions
Does rural mean farmland?
No. Many established suburban neighborhoods and small towns qualify. We check the exact address for you.
Can I use USDA for an investment property?
No. USDA financing is limited to owner occupied primary residences.
What if my income is slightly over the limit?
Certain deductions such as childcare and dependents may lower your qualifying household income. It is worth a review before ruling it out.
Program disclaimers
- * Higher interest rates apply
- ** For a 30-year, fixed-rate loan
- Program details are informational only and are not an offer for extension of credit or a commitment to lend. Terms are subject to change without notice.
Ready to explore USDA financing?
Start a conversation with a licensed loan officer, or begin your application whenever you're ready.