The Benefits of a USDA Loan

A financing option designed to meet the needs of today’s home buyer.

No Money Down

USDA provides one of the few true 100% first mortgage products, which means a buyer may purchase with no down payment.

Seller Paid Closing Costs

In addition to no down payment, USDA even allows for the seller to pay up to 6% of the purchase price in closing costs and pre-paids for the buyer.

Flexible Credit Criteria

With sufficient credit scores, it is possible to receive a USDA no money down approval. Ask your loan officer for the specifics.

Lower Mortgage Insurance Premiums

The USDA funding fee is the cheapest compared to FHA and VA loans.

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Explore USDA Loans

If you’re ready to learn more about USDA loans, you’re in the right place! USDA loans are flexible when it comes to credit scores. Additionally, most U.S. properties are eligible, and middle-income families often meet income requirements. Explore our resources and start finding answers to your questions about USDA loan requirements, fees, options, and more.


All USDA Home Loan Resources


The USDA loan program offers several benefits, including no down payment, low mortgage insurance premiums, flexible credit score requirements, competitive interest rates, and the option for the seller to pay up to 6% in closing costs and pre-paids for the buyer.

While USDA home loans provide 100% financing, you may use down payment assistance in conjunction with a USDA loan to cover the closing costs on your mortgage.

Although USDA loans offer many perks for eligible home buyers, the loan program has a few downsides. USDA loans are only for purchasing a primary residence, and the home has to be in a USDA eligible area. There are also household income limits for potential USDA buyers.

Yes, USDA mortgages are an excellent financing option for buyers that plan to buy a home in a USDA-eligible location. Once we review your mortgage application, credit score, and income, your mortgage loan officer can determine if a USDA rural housing loan would be a good fit for your home purchase. If you aren’t eligible for a USDA loan, there are several home loan programs to explore (i.e., VA, Conventional, FHA loans) that may better match your home financing needs.

The USDA Rural Development Guaranteed Loan is an excellent option for first-time home buyers who are searching for a loan program that does not require a down payment, offers flexible credit criteria, and low mortgage insurance payments. However, the first-time buyer must meet USDA’s eligibility requirements. If USDA eligibility is an obstacle, an FHA loan is often the next choice for a first-time buyer.

No, USDA loans are not just for first-time home buyers. These mortgages are available to any home buyer that qualifies.


To qualify for a USDA rural development loan, you must be a US citizen that plans to purchase a primary residence in a USDA-eligible area. Your household income must be less than 115% of the median income in your area. You’ll also need a steady employment history, a healthy debt-to-income ratio, and a minimum credit score of 640.

You can search for USDA-eligible areas using the USDA eligibility map. We provide an overview of the USDA loan map to determine if your property’s location is in an eligible area here.

Your total household income determines USDA eligibility. In 2022, the household income limit for 1-4 occupants is $91,900. For households of 5-8 people, the income limit is $121,300. The USDA housing income limits adjust to account for the cost of living. Learn more about USDA income limits here.

There is no down payment requirement for a USDA loan. You can finance a home’s total purchase price with USDA financing. While you’re not required to make a down payment on your mortgage, you can do so if you’d like a lower monthly mortgage payment or if you’d like to have equity in your home upon purchase.

The standard maximum (DTI) debt-to-income ratio requirement for a USDA home loan is 41%. However, there are specific instances where the maximum DTI can go as high as 46%. Learn more about USDA debt-to-income ratio requirements and solutions here.

USDA does not have a minimum credit score guideline, and in fact, USDA guidelines are very flexible when it comes to credit requirements. While there is no set guideline, we recommend a credit score of 640 or higher as a baseline to prepare for your USDA mortgage application. Learn more about USDA loan credit requirements.

Yes, getting a USDA home loan is possible if you have student loan debt. Learn more about USDA’s guidelines regarding student loans here, and learn more about buying a home with student loan debt.


USDA loan rates will vary depending on factors, including current market rates, your credit score, your down payment amount,  the home’s location, your loan type, and more. The best way to determine your USDA mortgage interest rate is to speak with a loan officer, and we can provide an accurate estimate that’s specific to your situation. Learn more about what impacts mortgage interest rates here.

USDA interest rates are similar to interest rates offered for VA or FHA home loans. However, mortgage insurance is the cheapest on a USDA loan versus all other mortgage types. Check with an OVM Financial loan officer to determine the current status of USDA interest rates.

Types of USDA Loans

The main difference between the two types of USDA home loans boils down to who is funding the loan. With a USDA direct loan, you borrow funds directly from USDA to purchase your home, and a private lender like OVM Financial can offer a USDA guaranteed loan. USDA direct loans are unique because they have loan limits and offer low-income buyers subsidized payment assistance to reduce their mortgage payments temporarily. Learn more about the difference between each USDA loan program here.

USDA Loan Rules & Guidelines

Unlike conventional or FHA loans, USDA loans do not have a maximum loan amount limit or a cap on the home's sales price. However, there are income limits for USDA loans. If your income exceeds a certain amount, you will not qualify for a mortgage loan.

No, USDA loans do not require private mortgage insurance. However, USDA buyers will pay a USDA guarantee fee (1% of the loan amount) which protects the lender if the USDA borrower defaults on their loan. USDA mortgage insurance is the most affordable among all loan programs, and you can finance the USDA guarantee fee into your total loan amount.

No, you are not required to complete a home inspection to get a USDA mortgage. However, it is wise to move forward with a home inspection, and USDA guidelines will require an appraisal to determine if the home meets the program’s standards.

USDA guidelines have specific requirements for the location or the home site. Learn more about USDA site requirements here.

You can only use a USDA mortgage to finance a primary residence. A USDA home loan cannot be used to purchase an investment property or a second home. Conventional loans are a great alternative if you are interested in financing a rental property.

USDA does offer the option to finance multi-family housing. However, OVM Financial specializes in USDA guaranteed loans for single-family housing only.

Yes, you can finance a manufactured home with a USDA. OVM Financial does not offer USDA loans for this type of housing, but we can refer you to a lender that can help if you are interested in financing this property type.

Yes, a buyer can assume a USDA rural development loan. Learn more about the process for assuming a USDA home loan here.

Yes, the co-borrower must plan to reside in the home. The co-borrower will have equal responsibility in repaying the USDA loan. Learn more about using a co-borrower to purchase a home here.

You will need to wait three years after a foreclosure before applying for a USDA home loan. Learn more about foreclosure waiting periods here.

There will be a 3-year waiting period before you can apply for a USDA home loan after a short sale. Learn more about short sale waiting periods here.

Yes, a seller can pay up to 6% of closing fees and pre-paids on a USDA home loan. Learn more about seller-paid closing costs here.

Loan Program Comparison

USDA and conventional loans have several differences. USDA loans are primarily for low-to-moderate-income buyers who plan to purchase a home in a rural location. Conventional loans do not have income limits or specific requirements for the home's location. On the flip side, conventional loans have a minimum down payment requirement and tighter credit score criteria. Check out our complete comparison guide to learn the differences between a USDA loan and a conventional loan.

USDA and FHA loans both offer flexible credit score guidelines and affordable mortgage payments. The United States Department of Agriculture regulates USDA loans, while the Federal Housing Administration regulates FHA loans, and the down payment requirements are also different. Check out our complete comparison guide here to compare and contrast the two loan programs.

Both loan programs are backed by the government, offer a zero-down payment option for qualified buyers, have flexible credit score requirements, and offer competitive interest rates. The significant difference between the two programs is that VA loans are exclusively for active duty, veterans, and surviving spouses of the US military. USDA rural development loans are primarily for low to moderate-income buyers who plan to buy a single-family home in a USDA-eligible area.

USDA Loan Refinance

Yes, you can refinance a USDA loan. USDA refinancing options include a USDA streamline refinance, streamlined assist refinance, and non-streamlined refinance. Learn more about your options for USDA mortgage refinancing here.

No, cash-out refinancing is not permitted with a USDA mortgage loan.

Yes, you can refinance an existing USDA loan into another loan type, such as a conventional loan. You may consider converting to another loan program if you’d like to transform your home into a rental property. Consult with our mortgage experts to determine which loan type is best for your transition.

Yes, a streamlined refinance is available with a USDA loan. If you purchased your home with a USDA loan, you could participate in this type of mortgage refinance 12 months after closing on your USDA home loan. A streamlined refinance gives the borrower the option to refinance without a home inspection or appraisal. Learn more about this refinance option and the requirements to get started here.

You can refinance a USDA home loan 12 months after your initial purchase.

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1. Create an Account

Choose your username and password to begin your online loan application.

2. Fill Out Application

Tell us about yourself, your credit score, and your financial situation so we can find loan options.

3. Review & Submit

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4. Upload Documents

Submit documents to help us verify your application. We may request follow-up items as we review your application.

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