The USDA 0% down loan program, also known as the USDA Rural Development Loan or USDA Guaranteed Loan Program, is a mortgage program offered by the United States Department of Agriculture (USDA) to help eligible individuals and families purchase homes in designated rural areas. This program aims to promote homeownership and stimulate economic growth in rural communities.

Here are the key details and features of the USDA 0% down loan program:

Eligibility: To qualify for a USDA loan, applicants must meet certain criteria, including:

  1. Income limits: There are income limits based on the area’s median income. The limits vary depending on the location and the number of people in the household. Generally, the income limit is set at 115% of the median income for the area.
  2. Location: The property being purchased must be located in an eligible rural area as defined by the USDA. These areas are typically outside the city limits of major metropolitan areas, but there are exceptions. The USDA provides an online map where you can check the eligibility of a specific address.
  3. Citizenship or legal residency: Applicants must be U.S. citizens or have permanent residency status.
  4. Credit and repayment history: While the USDA does not set a minimum credit score requirement, lenders who participate in the program often have their own credit standards. A good credit history with a reliable repayment record is generally required.

Loan Features:

  1. Zero down payment: The USDA loan program allows borrowers to finance 100% of the purchase price of the home, eliminating the need for a down payment. This feature makes it an attractive option for individuals who may not have saved up enough money for a traditional mortgage down payment.
  2. Competitive interest rates: USDA loans typically offer competitive interest rates that are often lower than those offered by conventional mortgages. The exact rate will depend on factors such as the borrower’s creditworthiness and market conditions at the time of application.
  3. Mortgage insurance: USDA loans require the payment of an upfront guarantee fee and an annual mortgage insurance premium (MIP). The upfront guarantee fee can be financed into the loan amount, while the MIP is divided into monthly payments. These fees help protect the lender in case of borrower default.
  4. Loan limits: USDA loans do not have a maximum loan amount. Instead, the loan amount is determined based on the borrower’s repayment ability and the appraised value of the property. However, there is a limit on the borrower’s debt-to-income ratio, which typically should not exceed 41%.

Application Process:

  1. Find a USDA-approved lender: To apply for a USDA loan, borrowers must work with a lender that participates in the program. The USDA provides a list of approved lenders on their website. . Or, contact Sid at for a list of lenders which we have had success.
  2. Complete the loan application: The borrower needs to complete the lender’s loan application and provide the necessary documentation, including income verification, employment history, and asset information.
  3. Lender’s review and underwriting: The lender reviews the application, verifies the provided information, and assesses the borrower’s creditworthiness. They also determine if the property meets USDA eligibility requirements.
  4. USDA loan approval: If the lender approves the loan, they submit the application to the USDA for final approval. The USDA reviews the application and ensures that it meets their guidelines.
  5. Closing and loan disbursement: Once the loan is approved, the borrower proceeds with closing the loan, which involves signing the necessary documents. After closing, the loan funds are disbursed, and the borrower becomes the homeowner.

It’s important to note that the USDA loan program has income and location restrictions and is primarily intended for low-to-moderate income individuals and families looking to purchase homes in rural areas. It’s recommended to consult with a USDA-approved lender or the USDA directly for detailed and up-to-date information about the program.

*This post is for informational purposes, specific loan requirements and guidelines will be provided by a USDA approved lender for each specific loan.

Contact Sid Stidham to find an eligible USDA 100% finance property. (352) 2 one 5- 2 six 31