What areas qualify for USDA loans?

Approximately 97% of U.S. land mass is USDA-eligible, including many suburban areas outside major cities. Use the USDA eligibility map at eligibility.sc.egov.usda.gov to check specific addresses.

What are the income limits for USDA loans?

Household income cannot exceed 115% of the area median income. Limits vary by county and household size. For example, a family of 4 in many California counties might have a limit around $110,000-$130,000.

Is USDA mortgage insurance cheaper than FHA?

Yes, significantly. USDA charges 1.0% upfront and 0.35% annually, compared to FHA's 1.75% upfront and 0.55% annually. On a $250,000 loan, USDA saves about $500/year in annual insurance alone.

Can I buy a home in California with a USDA loan?

Yes, many California areas qualify for USDA loans, particularly in the Central Valley, northern California, inland areas, and smaller coastal communities. Major metro areas like Los Angeles and San Francisco proper are not eligible, but surrounding suburbs may be.

USDA Loans: Zero Down for Rural & Suburban Homes

USDA loans offer 100% financing with no down payment for homes in eligible rural and suburban areas. Lower mortgage insurance costs than FHA and competitive rates. Income limits apply.

What Is a USDA Loan?

USDA loans are mortgages guaranteed by the U.S. Department of Agriculture through its Rural Development program. Designed to promote homeownership in less densely populated areas, USDA loans offer zero down payment, below-market interest rates, and lower mortgage insurance costs than FHA. Despite the name, many suburban areas qualify — approximately 97% of U.S. land mass is USDA-eligible.

USDA Loan Requirements

No Down Payment

100% financing available. Like VA loans, USDA requires no down payment — a major advantage for buyers with limited savings.

Location Eligibility

Property must be in a USDA-eligible area. Check the USDA eligibility map. Many suburbs and small cities qualify.

Income Limits

Household income cannot exceed 115% of the area median income. Limits vary by county and household size. Not all income is counted the same way.

Credit Score

No official USDA minimum, but most lenders require 640+. Borrowers with 640+ get streamlined processing. Below 640 requires manual underwriting.

Guarantee Fee

Upfront: 1.0% of loan amount. Annual: 0.35% of loan balance. Significantly lower than FHA's 1.75% upfront + 0.55% annual MIP.

Primary Residence Only

Must be your primary residence. No investment properties or vacation homes. Property must meet USDA minimum standards.

USDA vs. FHA vs. VA Comparison

Feature	USDA	FHA	VA
Down Payment	0%	3.5%	0%
Upfront Fee	1.0%	1.75%	1.25%–3.3%
Annual Insurance	0.35%	0.55%	None
Min. Credit	640 (typical)	580	620 (typical)
Income Limits	Yes (115% AMI)	No	No
Location Limits	Rural/suburban only	No	No

USDA loans are an excellent option for buyers in eligible areas who want zero-down financing with low insurance costs. Check today's rates or use our mortgage calculator to estimate your USDA payment.