The USDA loan is also known as the USDA Rural Development Guaranteed Housing Loan Program.

It’s guaranteed by the US Department of Agriculture, just like FHA, VA, and other government-backed loans. It was created with the intention of providing a mortgage option to rural property buyers with restricted financing options. It’s no longer just a loan for farmers and rural property owners as cities grow and suburbs expand. It’s becoming a feasible mortgage choice for folks who wish to live in the country rather than the city.

The property you buy must be in a USDA designated rural area to qualify for a USDA house loan, but it doesn’t have to be all farmland. Small towns and suburbs are included in the nearly 97 percent of the United States that are eligible. The USDA Mortgage Eligible Area Requirements Map will show you all of the places where this loan is available.


The USDA loan was created with low to moderate income earners in mind. According to the program’s standards, income must be up to 115 percent of the area’s median income.

This can be quite generous in many sections of the country. The whole income of a household is assessed during the application process for lower-income buyers, which helps to boost eligibility. This can include income from a kid or other family member who is not listed on the loan application but lives in the residence.

U.S. citizenship or permanent residency

A monthly payment that’s 29% or less of your monthly income

Dependable income, usually for a minimum of 24 months

Good credit history. Applicants with a score of 640 or higher shouldn’t have any issues


  • No down payment
  • Very low interest rates
  • Low monthly private mortgage insurance
  • Flexible credit requirements
  • Length of loan

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