What does this program do?
This no down payment, 100% financing program assists approved lenders in providing low- and moderate-income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas. Eligible applicants may purchase existing homes (which may include costs to rehabilitate, improve or relocate the dwelling) or build new.
This program is NOT restricted to first-time homebuyers.
Who may apply for a USDA Loan?
Applicants must:
- Have a household income that does not exceed 115% of median household income.*
- Agree to occupy the dwelling as their primary residence.
- Be a U.S. citizen, U.S. non-citizen national, or Qualified Alien.
- Must be located within an eligible rural area.*
- Must be a single-family dwelling (may include detached, attached, PUD, condo, modular, and manufactured).
- Not be suspended or debarred from participation in federal programs.
What properties are eligible?
HUD 4000.1 minimum standards.
- No set maximum purchase price (based solely on applicant repayment ability).
- No set acreage limits. Must be common for the area.
- No seasoning requirements (“flipped” properties allowed).
How can I check on a specific address?
What are applicant qualifications?
- Income. Non-Self-Employed: One-year history required. Self-Employed and Seasonal: Two-year history required.
- Assets. No down payment or reserves required.
- Monthly housing payment. Total payment (principal, interest, taxes, insurance, HOA dues, RD annual fee) typically should not exceed 29% of gross monthly income.
- All monthly debt payments. All payments included on credit report, including proposed new mortgage payment, typically should not exceed 41% of gross monthly income. Student loan payments. Fixed payment: use actual payment or 1% of loan balance. Non-fixed payment (IBR, graduated, adjusted, etc.) plans: Use 0.5% of loan balance.
- Seller (or interested party) contributions. Not to exceed 6% of sales price.
- Gift funds. No limit
What types of loan products are available?
- Purchase existing or build new with the Single-Close construction program.
- Current USDA Rural Development loan holders can take advantage of lower rates by utilizing one of Rural Development’s refinance options.
- Interest rate is negotiated between the applicant and the lender. Rate must be a 30-year fixed rate.
- Program lending is extended to 100% of appraised value, not purchase price, so borrowers may potentially include closing costs and home repair expenses into USDA financing.
- Funds may be used for closing costs, reasonable and customary expenses associated with the purchase transaction, connection fees for utilities, tax and insurance escrows, essential household equipment, site preparation.
Check out what your monthly payment could be by using our USDA Mortgage Calculator…
Our mortgage calculators are for demonstration purposes only and may not reflect actual numbers for your specific mortgage. Contact us and we will walk you through the best possible mortgage scenario for your specific needs!
Principal & Interest (P&I)
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Annual Guarantee Fee
$
Taxes & HOA
$
Homeowners Insurance
$
Purchase Price
Home Value
$
Down Payment
$
Current Mortgage Balance
$
Cash Out
$
Upfront Guarantee Fee
$
Total Loan Amount
New Loan Amount
$
Home Equity After Cash Out
$
Estimated Taxes & Insurance
Property taxes are generally estimated to be 1.2% of the home's value, but may vary based on your location. Annual homeowners insurance is roughly 0.35% of the home's value but can change based on insurer. Your loan specialist can help you determine property tax and insurance rates in your area.
Annual Guarantee Fee
The USDA Annual Fee is 0.35% of the loan amount and is paid to the USDA to compensate mortgage lenders should a mortgage go into default. This fee is paid at closing and borrowers typically choose to finance it into the loan. The USDA Annual Fee is lumped into your monthly payment and is paid for the life of the loan.
USDA Funding Fee / Upfront Guarantee Fee
The USDA Funding Fee or Upfront Guarantee Fee is paid to the USDA to help fund the program. The USDA Funding fee is paid at closing and typically financed into the loan. The USDA Funding Fee is 1.0% of the total loan amount.
Amount Financed
Purchase Price (-) Down Payment (+) Upfront Guarantee Fee
Estimated Payment
$ /mo
Loan amount
$
Down payment
$
Cash Out
$
Home Equity After Cashout
$
Interest rate
Loan term
Taxes & insurance included?
Property tax
Homeowner's insurance
$
Upfront guarantee fee
$
Annual guarantee fee rate
$
Annual guarantee fee
$ /mo
HOA dues
$
Payment Breakdown
Amortization
Principal vs. Interest
Amortization Schedule Breakdown
Our detailed amortization schedule breaks down your mortgage payments, showing how they are split between interest and principal over the life of your loan.
Note: The actual monthly payment may be higher than what is shown here, as this schedule does not account for variable costs such as property taxes and home insurance, which are often included in your total mortgage payment.
- Principal payments: $$240,000 (the amount borrowed)
- Interest payments: $$297,554 (the cost of borrowing)
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