Eligibility Requirements
Property Location

The home must be located in an eligible rural area as defined by USDA.
You can check property eligibility on the USDA website.
Income Limits

Household income must not exceed 115% of the median income for the area.
All income from household members is included, even if they are not on the loan.
Occupancy

The home must be the borrower's primary residence.
USDA loans cannot be used for investment properties or vacation homes.
Credit Requirements
Credit Score

A minimum credit score of 640 is typically required for automated underwriting.
Scores below 640 may require manual underwriting with compensating factors.
Credit History

A history of on-time payments for at least the past 12 months is generally required.
Collections or charge-offs may need to be resolved, depending on the lender's guidelines.
Loan Requirements
Loan Type

Only fixed-rate loans are allowed (30-year terms are standard).
No Down Payment

USDA loans allow for 100% financing, meaning no down payment is required.
Mortgage Insurance

An upfront guarantee fee of 1% of the loan amount is required.
An annual fee of 0.35% of the loan balance is added to monthly payments.
Debt-to-Income (DTI) Ratios
Standard Ratios

Front-end (housing) ratio: 29%
Back-end (total debt) ratio: 41%
Higher Ratios

May be allowed with compensating factors, such as a strong credit score or significant savings.
Employment and Income
Stable Income

Borrowers must show a steady income for at least