How to Qualify for USDA Loan
The USDA Loan is a mortgage option available to some rural and suburban homebuyers. USDA Home Loans are insured by qualified lenders and guaranteed by the United States Department of Agriculture. USDA loans are particularly favorable to those living in rural or low-income areas. USDA Loans offer $0 money down, lenient eligibility requirements and competitive interest rates, due to the loan being guaranteed by the USDA.
USDA mortgages standalone as the only mainstream zero money down program available to borrower that have not served in the military. Eligible borrowers will be hard pressed to find a home loan program that offers for favorable terms.
Is my area Eligible? Check the USDA website to determine if the property address qualifies.
Minimum Qualifications for USDA Loans
- US citizenship or legal permanent resident.
- Ability to prove creditworthiness, typically with a credit score of at least 640
- Stable and dependable income.
- A willingness to repay the mortgage – generally 12 months of no late payments or collections.
- Repayment Income target debt-to-income ratio 41%.
- Adjusted household income is equal to or less than 115% of the area median income. Check Income qualification of the USDA Website.
- General USDA income limits are:
- 1-4 member household: $103,500.
- 5-8 member household: $136,600.
- Regional differences may apply.
- The property serves as the primary residence and is located in a qualified rural area.