USDA Loans

A mortgage backed by the U.S. Department of Agriculture for homes in eligible rural and small-town areas. The common version, the Guaranteed loan, comes from a private lender with USDA guaranteeing most of it. The Direct loan comes from USDA itself and is limited to lower-income households.

No. An eligible buyer can finance 100% of the purchase price. You’ll still need money for closing costs, prepaid taxes and insurance, and possibly some savings left over after closing, unless the seller or a gift covers the costs.

Type the full street address into the USDA Property Eligibility Map. A green result means the address currently sits in an eligible area. USDA confirms property eligibility again during the loan, so check before you write an offer, not after.

For a Guaranteed loan, adjusted household income can’t exceed 115% of the area median for your county and household size. The 2025 one-to-four-person limit starts at $112,450 and is higher in most California counties. Direct loans use lower limits.

USDA doesn’t set one. Most lenders look for 640, which is the score USDA’s automated system needs to approve you. Below 640 a person reviews the application by hand, which works if the last 12 months of payments are clean.

No PMI. USDA charges a 1% upfront guarantee fee, normally financed into the loan, and a 0.35% annual fee paid monthly. On a $450,000 loan that’s roughly $132 a month in the first year.

Sometimes. The upfront fee almost always gets rolled in, and closing costs can be too if the home appraises above the purchase price. Otherwise seller credits of up to 6% or gift funds are the usual ways to cover them.

Yes. Guaranteed purchase loans are 30-year fixed only. The lender sets the rate off current market pricing, your credit, and the rest of your application.

Yes. USDA has streamlined refinance options for existing USDA borrowers. The streamlined-assist version skips the appraisal in most cases and requires the new payment to be at least $50 a month lower than the old one.