Yes — if the property and your income meet the requirements, a USDA loan can be a powerful way to buy a home with no down payment at all.
What Is a USDA Loan?
The USDA Single Family Housing Guaranteed Loan Program is backed by the United States Department of Agriculture. Despite that name, you don't need to be a farmer or buy farmland. This program is available for standard residential properties — single-family homes — as long as the location qualifies and you intend to use the home as your primary residence.
Location Requirements
USDA loans are designed for rural and suburban areas, not major urban centers. The good news: the definition of "rural" is broader than most buyers expect. Many suburban communities — including areas outside mid-sized cities — fall within eligible boundaries. You can look up any specific address or zip code on the USDA's eligibility map to see whether a property qualifies.
Income Limits
This program is designed to serve low- to moderate-income households, so there are income caps. The limits vary by location and household size, so a limit that rules you out in one county might be different in a neighboring one. The USDA also allows certain deductions — like documented childcare expenses — to count against your income for eligibility purposes. Income from self-employment, bonuses, and commissions is typically included in the calculation.
Other Things to Know
- No down payment required for eligible buyers and properties
- A funding fee applies (similar to the VA loan's funding fee), which can typically be rolled into the loan
- You'll need to meet standard credit and debt-to-income requirements
- If you plan to make repairs after purchase, there are separate USDA programs that may allow renovation costs to be included in the loan
USDA loans are genuinely underused — a lot of buyers don't even know they're eligible. If you're curious whether the home you're looking at qualifies, let's find out together.
