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.

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 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.

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.