USDA/Rural Development Loans
A USDA Loan* is a home loan guaranteed by the United States Department of Agriculture (USDA) to provide affordable financing options for properties located in designated small towns and suburbs away from the city. This program helps eligible low- to moderate-income families who are interested in living “outside the city” achieve homeownership by offering a no down payment option. Eligibility is based on the property size, location and condition along with income and other qualifying factors and maximum loan limits vary based on location. The USDA loan is for primary residences only and cannot be used to purchase an investment property.
USDA Loan Benefits & Eligibility Requirements
- 100% financing + required guarantee fee = 102% of the appraised value
- Low interest rates
- Low closing costs, which can include gift funds
- Low FICO score requirements
- 30-year, fixed-rate mortgage
- The property must be located in a USDA designated rural area
- Household members can have a total income of up to 115% of the area’s medial income
- Household must be able to afford the mortgage payment, including property taxes, homeowners insurance and the annual guarantee fee payable on a monthly basis
USDA Loan FAQs
Do only first-time homebuyers qualify for a USDA loan?
No, the USDA loan option is available to both first-time homebuyers and repeat homebuyers.
Can I purchase a property with the USDA loan without a down payment?
Yes! Qualified borrowers can purchase without a down payment.
How do I know if my home is USDA-eligible?
You can learn if your home is located in a USDA designated rural area by visiting the USDA website and entering your address to their property eligibility map.
*USDA Guaranteed Rural Housing loans subject to USDA-specific requirements and applicable state income and property limits. Fairway is not affiliated with any government agencies. These materials are not from USDA or RD and were not approved by USDA or RD or any other government agency.