USDA “rural development” loans in plain language.
USDA loans are designed to help eligible buyers purchase homes in certain rural and semi-rural areas, with income and location limits. This page is general education only and not an official USDA publication.
What is a USDA loan?
A USDA loan is a mortgage program backed by the U.S. Department of Agriculture. It is intended to support homeownership in qualifying areas, subject to income and other limits.
Basic features (general, may vary)
- Often allows no down payment for eligible buyers and properties.
- Property must be in a USDA-eligible area and meet program guidelines.
- Household income must usually be below a local limit that depends on family size.
- Generally used for primary residences, not second homes or investments.
Who might look at USDA?
- Buyers comfortable living in qualifying rural/semi-rural areas.
- Households whose income falls within USDA limits for their area.
- People who have limited down payment funds but stable income.
Things to consider
- Location and income rules are strict and must be checked for your exact address and household.
- There is a guarantee fee which may be financed, similar in some ways to mortgage insurance.
- Some property types and uses will not qualify.
Any real scenario should be matched against current USDA maps and income tables, plus lender guidelines.
See if a USDA-style loan is worth exploring
If you are open to certain locations and your income is within limits, USDA can sometimes be a powerful way to buy with little or no down payment.
We will check location and income ideas and compare USDA with other possibilities rather than assuming one option is always best.