No PMI
Avoid private mortgage insurance; instead pay a small USDA guarantee fee.
Flexible Credit
Qualify with lower credit scores and lenient underwriting standards.
Low Rates
Enjoy interest rates below conventional loans, reducing monthly costs.
Zero‑Down
Buy with no down payment, financing up to 100% of the home.
USDA Loan Eligibility Requirements
To qualify for a USDA Home Loan, applicants must meet the following criteria:
U.S. citizenship or legal permanent residency
A minimum credit score of approximately 620 (requirements may vary by lender)
A debt-to-income (DTI) ratio of 41% or less
Household income that does not exceed 115% of the area median income (AMI)
The property must be a primary residence located in a USDA-approved area
Credit Score Guidelines
While the USDA does not set a minimum credit score requirement, most lenders look for a FICO® score of at least 620. Borrowers with lower scores may still qualify through manual underwriting, depending on compensating financial factors.
Down Payment Requirements
USDA Loans are one of the few mortgage products that offer 100% financing, meaning no down payment is required. This makes them an attractive option for qualifying homebuyers.
Debt-to-Income (DTI) Ratio Limits
Applicants should aim for a DTI ratio of 41% or less. DTI is calculated by dividing total recurring monthly debts (such as rent, auto loans, and credit card payments) by gross monthly income.Example:If your monthly debts total $2,300 and your gross monthly income is $6,000:$2,300 ÷ $6,000 = 38.3% DTI
Mortgage Insurance Requirements
USDA Loans do not require private mortgage insurance (PMI). However, they do include a small upfront guarantee fee and an annual fee, both of which are significantly lower than traditional mortgage insurance costs.
Eligible Property Types
Qualifying properties must be:
Single-family homes
Located in USDA-designated rural or suburban areas
Intended for use as the borrower’s primary residence
In compliance with HUD’s minimum property standards
There are no restrictions on purchase price or lot size. Use the USDA’s eligibility map to confirm if a property qualifies.
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