USDA Loans

What are USDA Loans?


USDA loans are just like every other loan in the sense there are 30 year, 20 year, 15 year, and 10 year loans.  There are fixed rate USDA loans and there are adjustable rate USDA loans.  USDA loans are made by and held by the same banks and financial institutions that make and service every other type of loan.  What makes the USDA loan different from other loans is that the underwriting guidelines and guarantee to financial institutions comes from the federal government's Department of Agriculture (USDA).

Many people mistakenly think that USDA loans are for agricultural properties when in fact agricultural properties are ineligible for the USDA loan.  Originally designed for properties that exist in between high density residential and traditional agricultural multi-acre properties, USDA loans have become a very popular loan as congress has blocked the USDA from updating their map or rural properties for almost a decade.  Many former rural areas have been developed with high density residential properties that while not the original target of he USDA program are 100% eligible for the 100% loan-to-value loan.


USDA Loans

Great for First-time Home Buyers

100% Financing (including Closing Costs)

No Down Payment Requirements

No Prepayment Penalties



Advantages of USDA Loans

  • Loan-to-value. USDA loans are available up to 100% loan-to-value + closing costs can be financed up to the amount that the appraisal exceeds the purchase price. 
  • Mortgage Insurance. At 0.35% annually, the USDA loan has the least expensive mortgage insurance of any major loan product..



Disadvantages of USDA Loans?

  • Property Location Limits. USDA loans are only eligible in certain areas. To check the availability of a property in your area or to see the eligibility map, click here.
  • Income Limits. USDA guidelines limit the availability of USDA loans to individuals who earn equal to or less than 115% of the median area income. Broken into two categories; families of 1-4 persons and families of 5 or more people the maximum income amounts can limit the availability of this mortgage product.  To see the maximum income in your area, click here.