USDA Loans: The cost-saving loan for rural homebuyers.
In this guide, we'll explain what USDA loans are, how they benefit homebuyers in rural and suburban areas, and how to decide if it's the right mortgage for you.
Interested in seeing if you qualify?
Let's Find Out
What is a USDA Loan?
- No down payment requirement
- Lower interest rates than a conventional loan
- Flexible credit guidelines
- Ability to roll closing costs into the loan
Quick Answer
USDA loans are home loans designed for lower-income homebuyers residing in qualifying rural areas.
Why Consider a USDA Loan?
Here's why homebuyers choose to finance their homes with a USDA loan.
No Down Payment Requirement
Qualified individuals can buy their home with a 0% down payment
Competitive Interest Rates
Because USDA loans are backed by the U.S. government, lenders can offer lower interest rates than conventional loans.
Roll Closing Costs Into the Loan
USDA loans allow buyers to finance closing costs, making the purchase even more affordable
Lower Income Qualification
Where some loans have income minimums to qualify, USDA loans are specific for buyers who make less than their area's median income
Pro Tip
USDA loans come with restrictions on where you can buy a home; however, you can often find USDA-eligible homes outside of most major cities.
USDA Loan Eligibility Requirements in 2025
Credit Score
+620 FICO (640 for streamlined processing)
Income
The household's adjusted gross income is less than 115% of the area's median income
Eligible Location
Qualifying homes must be located in a USDA-approved area found on the USDA's eligibility map
Debt-to-Income
Typically 43% or lower
USDA Appraisal
Qualifying homes must also pass an appraisal from a USDA-approved appraiser
Compare USDA Loans vs. FHA Loans and
USDA Loans
FHA Loans
What's your budget?
Curious about how much you can afford to spend on a home? Use our calculator to get an estimate on your maximum budget.
Maxiumum Home Price
$0
Maxiumum Monthly Payment
$0 /mo
The UMortgage mortgage calculators are for estimation purposes only. This is not a commitment to lend. For an exact quote based on your individual financial circumstances, please contact us.
How to Apply for a USDA Loan
Pre-Qualification
Answer a few questions with a UMortgage Loan Originator to see if you qualify.
Find a USDA-Eligible Property
Work with a real estate agent or shop for a home yourself that meets the USDA's location requirements and minimum property standards.
Lock In Your Rate
Choose to lock when you see a competitive rate to avoid surprises down the line.
Underwriting & Closing
Submit documentation, clear USDA underwriting, and close on your timeline.
Frequently Asked Questions about USDA Loans
Answers to the most common questions we get from borrowers about USDA loans.
Here's Why UMortgage is Your Best Choice
Relationships, Not Transactions
We’re here for more than just your mortgage. We’ll stick with you beyond closing to help you gain financial freedom through homeownership.
Local & Nationwide Expertise
With licensed loan officers across the country and deep knowledge of your local market, we’ll help you buy with confidence anywhere you call home.
Fast, Transparent Closings
We communicate with you every step of the homebuying or refinance process so you can close quickly without any hidden fees or surprises.