USDA Home Loans

Looking for a home loan with $0 down and 100% financing? It exists.

With USDA Home Loans, you can finally access the loan you need for the house you love.

Can a USDA Home Loan you turn your dreams of homeownership into reality?

Through USDA  Home Loans, you may finally be able to qualify for a home loan—something that may have seemed out of reach in the past. USDA Home Loans were created in order build up the economic stability and quality of life in rural areas throughout the United States.

Homesite Mortgage strives to make dreams of homeownership reality, and we will do everything we can to help finance your dream. Our experience offering USDA Home Loans has allowed us to put families in their own homes when that may have previously felt out of reach. No matter your situation, we will work with you and help you consider your options, including the possibility of a USDA Home Loan.


What are USDA Home Loans?

A USDA Home Loan is a home loan created and backed by the U.S. government. They’re available throughout rural areas of the United States and to borrowers with moderate to low incomes. USDA  Home Loans do not require a down payment, and offer interest rates at or below-market rates. Qualifying for a loan typically depends on location of property to be purchased, income level, and number of dependents on borrower’s tax returns.


Why USDA Home Loans?

  •  30-Year Fixed Rate
  • PMI Available at Lowest Rates
  • Lower Interest Rates Available
  • Flexible Credit Guidelines
  • Loans are Guaranteed by U.S. Government
  • Roll Closing Costs into Mortgage
  • No Down Payment Required
  • No Maximum Purchase Price
  • Gift and Grant Funds Allowed


What Options Exist for USDA Home Loans?

  • Single Family Housing Guaranteed Loans
  • Multi-Family Housing Guaranteed Loans

USDA Home Loans FAQs

Can I use a USDA home loan to buy a foreclosure 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 for sale to anyone, but you will still partner with a broker or real estate agency to make an offer and purchase the home.


What is the maximum loan amount of a USDA home loan?

There is no set limit in the USDA guidelines. The amount will be set by the lender you work with, and depend 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 home for each county throughout the country.

Traditionally, the USDA sets limits the debt-to-income ratio at 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 the closing costs of a USDA home loan be financed into the 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, lenders fees, notary fees, and escrow fees.


Is mortgage insurance required for USDA home loans?

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 to qualify for a USDA home loan?

The USDA does not have a set minimum credit score in the guidelines, but most lenders require a minimum credit score of 620–640. If you have a credit score below 620–640, 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.


Am I allowed to use USDA home loans on an investment 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 a primary residence are not allowed.


What kind of homes can be purchased with a USDA home 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.” It needs to have working mechanical systems and be free of termites.


Are USDA home loans only available to first-time homebuyers?

No, USDA loans have no restrictions regarding previous homeownership.


Who is eligible for a USDA home loan?

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


Are down payments required for USDA home loans?

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