Understanding USDA Home Loans

Did you know the United States Department of Agriculture (USDA) offers a home loan program? The USDA Loan allows buyers to purchase property in certain areas without a large down payment.

You don’t need to work in agriculture or buy a farm to qualify. You can use the loan to purchase a residential property, but you must occupy it as your primary residence.

USDA Location Requirements

Some location requirements apply, but they don’t only cover extremely rural areas. Many suburban areas also qualify for USDA loans. You can check eligibility by zip code or specific property address.

USDA Income Requirements

USDA loans target low-to-medium-income buyers. These limits allow buyers to purchase a home without saving for years for a down payment. Income requirements vary by state, county, and household size.

You may also deduct certain expenses, like child care, when calculating income. The USDA counts income from self-employment, bonuses, commissions, and rental properties to determine eligibility.

Financing Repairs or Renovations

If you plan to make repairs or renovations, you might include some costs in your loan. This option varies and requires additional paperwork during approval. After purchasing, you must provide proof that the work is completed.