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As a part of its Rural Development program, the United States Department of Agriculture offers low-interest loans to farmers and low-income borrowers buying property in rural areas or small towns. These loans feature a 30-year fixed rate mortgage, do not require a down payment and may be used for closing costs and even to finance new construction.

What Is A USDA Loan?

A USDA home loan is a competitively priced mortgage option that helps to make purchasing a home more affordable for low-income individuals living in designated rural areas. The U.S. Department of Agriculture backs USDA loans in the same way the Department of Veterans Affairs backs VA loans for eligible individuals such as veterans and their families.

This government backing means compared to conventional loans, mortgage lenders can offer lower interest rates in many cases. If you qualify, you can buy a home with no down payment, although you’ll still need to pay closing costs.


The USDA offers three main mortgage programs:

  • USDA Direct loans: These loans are issued by the USDA for qualifying low-income borrowers with interest rates as low as 1%.

  • USDA Loan guarantees: These loans are issued by participating lenders and offer low interest rates and minimal down payments.

  • USDA Home improvement loans: These loans are given to qualified homeowners to make repairs or improvements on their homes.

How To Qualify For A USDA Loan

You need to meet certain USDA eligibility requirements to be considered for a USDA construction loan or qualify for a USDA loan to buy a home. For example, you must live in the home and it must be your primary residence. 


You must be a U.S. resident, noncitizen national or permanent resident alien.


Homes financed by USDA loans must be in eligible rural or edge of suburbia areas. You can see if a home is eligible by visiting the USDA’s eligibility site, or you can simply contact one of our loan specialists. 


USDA loans are for families who demonstrate economic need, so your adjusted gross income can’t be more than 115% of the median income in the area. You can contact our office for more information on the requirements 

Credit Score

Most lenders require a credit score of 640 or better.

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