USDA Home Mortgage

Get a loan for your next home purchase with 100% financing — no down payment necessary!

USDA home loans may allow you to qualify where conventional loans fail. At Homesite Mortgage, we want you to be able to finance your dream, and in many cases, a USDA loan is the solution for your situation. If you feel that homeownership is out of reach for your family, we urge you to connect with our lenders and see how we can change your life.

It's not too good to be true, it's a USDA loan. Find out if you qualify.

USDA home loans can turn your dreams of homeownership into reality

USDA Loan Requirements

For years, the United States Department of Agriculture has tried to encourage more people to enjoy country living through USDA financing. They're ideal for prospective homebuyers with needs not met through conventional loans, such as those with adjusted or low incomes and those without safe housing.

USDA loans apply to primary residences only. To qualify, you must:

  • Be a U.S. citizen or permanent resident
  • Have dependable, consistent income
  • Have decent credit, usually above 620
  • Be able to pay your monthly payments with less than 29% of your income
  • Must be buying a house that is within a qualifying rural area

Who Is Eligible for a USDA Home Loan?

USDA loans are available to borrowers of low to moderate income levels who are seeking to purchase a home in a rural part of the United States. The income level is determined by each county and the number of people in your family. Check out the USDA eligibility map and income guidelines to see if you qualify.

Why Choose a USDA Rural Development Guaranteed Housing Loan?

The USDA Rural Development Guaranteed Housing Loan Program is one of the lesser-known government loan options, despite being one of the most accessible for lower-income prospective buyers. If you're willing to move anywhere in rural America, you can appreciate incredible benefits like:

  • Competitively low interest and PMI rates.
  • Flexible credit guidelines.
  • No down payment required.
  • Loans guaranteed by the U.S. government.
  • No maximum purchase price.
  • Ability to roll closing costs into mortgage.
  • Gift and grant funds considered in the loan application.
  • Flexible terms like a 30-year fixed rate.

Types of USDA Home Loans

When you apply for a USDA loan, you'll have to specify whether you are seeking to secure a:

  • Single Family Housing Guaranteed Loan: This loan is suitable for individuals and families looking to secure a loan on the rural house of their dreams.
  • Multifamily Housing Guaranteed Loan: Multi-family loan applications typically come from businesses and larger organizations that offer low-income housing in rural areas. There are strict guidelines on rental pricing to ensure the units are provided to low- to moderate-income families.

If approved, you can buy, build or fix up any home in eligible rural areas.

usda home loans


What's the difference between a USDA loan and a conventional loan?

Compared to conventional loans, USDA loans:

  • Are only available in rural areas.
  • Have a lower interest rate.
  • Require a lower — or even no — down payment.

What's the difference between an FHA and a USDA loan?

When exploring FHA loans and how they match up to USDA loans, many find USDA loans preferable due to:

  • No down payment: FHA loans still may require up to 3.5% down.
  • Income limits: FHA loans have no income limit, meaning more people can apply for them, whereas USDA loans have income caps.

Is there such a thing as a single-close USDA construction loan?

Construction loans can allow you to combine your construction and mortgage loans into one, resulting in a single mortgage, less paperwork for you, and more time enjoying the fruits of your labor.

Do USDA loans require a down payment?

No. One of the most popular features of USDA home loans is that no down payment is required—100% financing is available!

Can I use a USDA loan to buy a foreclosed home?

Yes, USDA home loans can be used to purchase foreclosed homes, short sales, homes sold by real estate agencies, and homes sold directly by the owner.

You should be eligible to purchase a foreclosed home with your own USDA loan as long as the property is USDA-eligible. The other option is to purchase a foreclosed home that was originally financed with a USDA loan—even if the USDA boundaries have changed, the property will still be grandfathered in since the original financing was started with a USDA loan. Take a look at these properties for sale by the U.S. federal government. These houses are available to the general public but still require you to work directly with a broker or real estate agency to make an offer and purchase the home.

What's the maximum USDA loan amount?

There is no set limit in the USDA guidelines. The amount will be set by the lender you work with and depends on your debt-to-income ratio, credit score, income, current assets, as well as payment history of previous mortgages or rent.

Reference the USDA site to research income eligibility based on different types of homes for each county throughout the country.

Traditionally, the USDA has set a maximum debt-to-income ratio of 41%, but if you have a credit score above 660 and can prove a history of stable employment, you may have more flexibility in your qualification for a higher loan amount.

Can closing costs be financed into a USDA loan?

Yes! You are allowed to finance the closing costs into the overall cost of the mortgage. Closing costs may include items such as origination fees, title insurance fees, credit repair costs, lender's fees, notary fees and escrow fees.

Do I need mortgage insurance with a USDA loan?

Yes, because no down payment is required for USDA home loans, mortgage insurance is mandatory. However, the mortgage insurance for a USDA home loan is traditionally much lower than it is for an FHA loan or conventional loan.

What's the minimum credit score for a USDA loan?

The USDA does not have a set minimum credit score in the guidelines, but most lenders require a minimum credit score of 620 to 640. If you have a credit score below 620 to 640, be prepared to offer an explanation as to why you have a lower credit score and offer documentation to back up your explanation. Additionally, it’s wise to have documentation that proves stable employment and recent history of making consistent rental or mortgage payments.

Can I use a USDA loan for an investment or rental property?

No, USDA loans can only be used for primary residences. Vacation homes, farms and other types of real estate that are not meant to be used as primary residences are not permitted under USDA loan guidelines.

What kind of homes can I buy with a USDA loan?

USDA home loans can be used to purchase a single-family home, manufactured home (additional appraisals may be required) and condos. The home must be owner-occupied. Homes purchased with a USDA home loan must be “decent, safe and sanitary.” Specific quality and safety guidelines include the need for working mechanical systems and for the home to be termite-free.

Are USDA loans only for first-time buyers?

No, USDA loans have no restrictions regarding previous homeownership.

Why Homesite Mortgage Is the Preferred USDA Lender in Missouri, Michigan, Illinois, Florida and Louisiana

When securing your home loan, it's important to have a team dedicated to going the extra mile. At Homesite Mortgage, we want you to have an exceptional experience from the moment you decide to apply for a USDA loan. Even if you're not qualified for our instant approval, we'll work with you to become qualified so you can get the loan and home you deserve.

Whether you're a first-time homebuyer or well-versed in mortgage requirements, make sure you work with a lender that will ensure everything goes according to plan. Talk to us about USDA pre-approval and financing today.

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