USDA Loans
100% financing may be available for eligible borrowers and eligible properties in qualifying rural and suburban areas.
Program Overview
USDA loans are mortgage loans guaranteed by the United States Department of Agriculture through the Rural Development Guaranteed Housing Loan Program. They are designed to help moderate-income borrowers in eligible rural and suburban areas pursue homeownership with low or no down payment, subject to USDA, lender, and program requirements. Despite the name, many suburban areas near major metro regions can qualify. Airus Lending is not affiliated with, endorsed by, or acting on behalf of the USDA or any government agency.
Who Is This Loan For?
- ✓ Homebuyers purchasing in USDA-eligible areas
- ✓ Moderate-income borrowers at or below area income limits
- ✓ First-time and repeat buyers who want zero down payment
- ✓ Borrowers looking for a government-backed alternative to FHA and VA
Key Benefits
Zero Down Payment
100% financing — no down payment required for eligible borrowers and properties.
Competitive Rate Options
USDA loans may offer competitive rates depending on borrower profile, lender pricing, market conditions, and program availability.
Lower Mortgage Insurance
USDA guarantee fees are lower than FHA MIP, reducing overall monthly cost.
Wide Eligibility
More suburban and semi-rural areas qualify than most borrowers expect.
Qualification at a Glance
General Requirements
- Property must be in USDA-eligible area
- Household income must not exceed 115% of area median income
- Credit score of 640+ (some lenders at 620 with manual underwrite)
- DTI up to 41% (higher with compensating factors)
- Primary residence only
- Upfront guarantee fee (1%) and annual fee (0.35%) apply
Advantages
- ✓ No down payment required for eligible borrowers and properties
- ✓ Competitive interest rate options
- ✓ Lower mortgage insurance than FHA
- ✓ Flexible credit with manual underwrite
- ✓ Seller can contribute up to 6% toward closing costs
- ✓ Loan amount is based on borrower qualification, income limits, property eligibility, and lender/program requirements
Tradeoffs to Consider
- ↔ Geographic restrictions — property must be in eligible area
- ↔ Income limits based on household size and county
- ↔ Primary residence only
- ↔ Guarantee fee required (upfront and annual)
- ↔ Longer processing time than some conventional programs
Common Scenarios
Suburban First-Time Buyer
A first-time buyer purchasing in a suburban town just outside a metro area. The property is USDA-eligible, allowing zero down payment with lower monthly costs than FHA.
Teacher in a Rural Community
A teacher earning $55K/year buys a $220K home in a qualifying rural area. USDA allows zero down and lower insurance costs, keeping the payment affordable.
Documents Typically Needed
- Two years of tax returns
- Two years of W-2s
- Recent pay stubs
- Bank statements
- Government ID
- USDA property and income eligibility verification
Frequently Asked Questions
USDA has an online eligibility map at rd.usda.gov. Your advisor can also check addresses for you. Many suburban areas outside major metros are eligible.
Broker Disclosure: Scout Financial Group Inc DBA Airus Lending is a licensed mortgage broker (NMLS #2187418) and does not make loans or credit decisions. Airus Lending works with multiple wholesale lenders to help borrowers compare available loan options. Final approval depends on the lender, automated underwriting findings, documentation, state requirements, and overall borrower profile. Not all applicants will qualify.