Integrity Home Funding Logo

USDA Loans: Affordable Homeownership in Rural Areas

We’ll help you find the right loan program. If you’re not quite ready, we’ll help get you there.

What Are USDA Loans?

USDA loans, backed by the United States Department of Agriculture, are designed to help low-to-moderate-income families in rural areas achieve homeownership. These loans offer zero down payment options and competitive interest rates, making homeownership more accessible.

Who Qualifies for a USDA Loan?

  • Income Requirements: Must fall within the USDA’s income limits for your area, which are typically set at 115% of the median income for the region. This includes all income from household members, even if they are not on the loan.
  • Location: The property must be in a USDA-eligible rural area, which can be verified using the USDA’s property eligibility map.
  • Credit Requirements: Most lenders require a minimum credit score of 640.
  • Debt-to-Income Ratio: USDA loans typically have a DTI limit of 41%, with exceptions up to 44% for borrowers with higher credit scores and stable employment.
  • Primary Residence: The home must be used as your primary residence.
  • Property Standards: The property must be in a USDA-eligible rural area and generally must be under 2,000 square feet.

Benefits of USDA Loans

  • No Down Payment: 100% financing available, making it easier to purchase a home without a large upfront cost.
  • Competitive Interest Rates: Often lower than conventional loan rates, reducing your monthly payments.
  • Flexible Credit Guidelines: More lenient credit requirements compared to conventional loans.
  • Low Mortgage Insurance: Lower mortgage insurance premiums than FHA loans.

Steps to Secure a USDA Loan

  1. Verify Property Eligibility: Use the USDA’s property eligibility tool to ensure the home is in an eligible area.
  2. Check Income Limits: Confirm that your household income falls within the USDA’s income limits for your area.
  3. Gather Documentation: Prepare necessary documents, including proof of income, tax returns, and employment history.
  4. Find a USDA-Approved Lender: Work with a lender who is approved to offer USDA loans.
  5. Submit Your Application: Complete the loan application and provide the required documentation.
  6. Home Appraisal: The property must be appraised to ensure it meets USDA standards.
  7. Close on Your Loan: Sign the final loan documents to complete the home purchase process.

Call to speak with a Local Home Loan Specialist today.

Scroll to Top