USDA  Loans


A USDA (United States Department of Agriculture) loan is a mortgage loan offered to rural property owners by the United States Department of Agriculture. USDA loan is officially called USDA Rural Development Guaranteed Housing Loan program. The loan is for properties in specific rural areas or areas with a population of less than 20,000 residents. This loan program has been around for a while but many people are still not aware of this opportunity. This loan is guaranteed by the United States Government and is the only mortgage available to the general public that doesn’t require a down payment.
The aim of the USDA rural development loan is to encourage growth and development in rural areas and equally give moderate to low income families a chance to purchase a home with affordable monthly mortgage payments.


Loan Guarantees

The USDA guarantees a mortgage issued by a licensed lender at low interest rate without a down payment. Mortgage insurance premium must be paid. Applicant must have an income of up to 115% of the median income for the area.

Direct Loan

This type of loan is mainly used to help low income families buy homes in rural areas. The applicant must have very low income (below 50 percent of the area median income) or low income (between 50 and 80 percent of the area median income). The family must be without adequate housing but be able to afford the mortgage payments, including taxes and insurance. Applicants must be unable to obtain credit elsewhere, yet have reasonable credit histories.

The funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites.

Rural Repair and Rehabilitation Loan

This type of loan provides funds to very low income earners to repair, modernize, improve and remove health and safety hazards from their home.
The applicant for this loan must be a very low income earner and unable to obtain affordable credit elsewhere. Grants are only available to homeowners who are 62 years and above and cannot repay a Section 504 loan(Guaranteed Rural Housing Loan).


  • The property to be purchased must be located in an eligible rural area as defined by USDA.
  • Agree to personally occupy the dwelling as their primary residence
  • Meet income eligibility
  • Demonstrate the willingness to meet credit obligations promptly
  • Evidence that you have steady and sufficient income that is enough to meet mortgage payments, as well as reserves each month
  • Have not been suspended or debarred from participation in federal programs


  • No down payment required
  • Low rates which are fixed by lenders
  • Fixed loan rates
  • There is no maximum loan size. The amount you can borrow is limited by your household’s debt-to-income.