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USDA Loans

Qualifications for a USDA Loan

Property Eligibility

USDAeligible properties don‘t always need to be in farming areas. The USDA classifies rural areas in broader termsin fact, 97% of US land qualifies for a USDA loan! Even if you don‘t think your property qualifies, these types of loans are worth investigating.

Eligibility Requirements

To qualify for a USDA loan, buyers must:

  • Purchase a home in a USDA-eligible area
  • Have a preferred minimum credit score of at least 640
  • Meet the income limits for the area
  • Occupy the dwelling as a primary residence
  • Be a U.S. citizen, U.S. non-citizen national, or qualified alien.

Income Limits

To qualify, home buyers will need to meet income requirements based on where the property is. USDA loans are aimed toward moderate income earners. Borrowers can not earn more than 115% of the median income for the home’s geographic location.

USDA Guarantee Fee

USDA home loans are an attractive option for eligible borrowers, particularly firsttime home buyers. While there is no requirement to make a down payment, there is a 1% guarantee fee which can be rolled into closing costs. This fee is relatively low compared to other loan programs such as FHA. In addition, borrowers are responsible for a 0.35% annual mortgage insurance fee, which is paid in monthly installments.

Overall, the fees associated with a USDA loan are much lower than other loan programs, making them an attractive option for those who qualify. This makes them an especially appealing choice for firsttime home buyers.


Apply for a USDA Loan

USDA loans can only by issued by USDA approved lenders. Let an expert at ShayMak Mortgage help determine if a USDA loan is right for you.

Our company is not endorsed by, nor acting on behalf of or at the direction of the U.S. Department of Housing and Urban Development, Federal Housing Administration, U.S. Department of Agriculture, Veterans Administration or the Federal Government.