USDA Home Loans
What if good credit and a steady income are not enough to qualify for a home loan at a commercial
lending institution, such as a bank, savingsand loan or mortgage company.
More rural families and individuals may be eligible to become homeowners with the help of a
USDA guaranteed home loan. When the federal government agrees to guarantee a loan, lending
institutions can help buyers while incurring less risk. Through USDA’s Guaranteed Rural Housing
Loan Program, low- and moderate-income people can qualify for mortgages even without a down
payment.
Guaranteed Rural Housing Loans
To be eligible, applicants must:
Have an adequate and dependable income;
Be a U.S. Citizen, qualified alien, or be legally
admitted to the United States for permanent residence;
Have an adjusted annual household income that does not exceed the moderate income
limit established for the area. A family’s income includes the total gross income of the
applicant, co-applicant and any other adults in the household. Applicants may be eligible to make certain adjustments to gross income—such as annual child care expenses and $480
for each minor child—in order to qualify.
USDA Rural Development field offices can provide information on the moderate income limits
for the areas that fall within their jurisdiction, and can provide further guidance on calculating
household income.
Have a credit history that indicates a reasonable willingness to meet obligations as they
become due;
Have repayment ability based on the following ratios: Principle, Interest, Taxes, and Insurance
(PITI) divided by gross monthly income must be equal to or less than 29 percent. Total debt
divided by gross monthly income must beequal to, or less than, 41 percent.