USDA Loans Explained

Jan 29, 2021

A USDA home loan from the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program is available to eligible primary homebuyers with low to moderate incomes for homes located in approved rural areas as defined by the USDA.

Applicants for USDA home loans may have an income of up to 115% of the median income for the area. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories. Also, the property must be located within the USDA RD Home Loan "footprint." USDA Loans offer 100% financing to qualified buyers and allow for all closing costs to be either paid for by the seller or financed into the loan. 


USDA loan guidelines are currently as follows:

  • 640 Min FICO
  • No Max Loan Amount: 100% Financing
  • Terms: 30 Years Owner Occupied Only
  • Income/Debt Ratio: 29% Housing/43% Total Debt


Other important information:

  1. USDA Funding Fee is 1% of the loan amount, which is financed into the mortgage.
  2. Monthly mortgage insurance fee is 0.35% times the total loan amount divided by 12.
  3. Do not have to be a first-time homebuyer to qualify, but cannot presently own a home.


To determine if a property is located in an eligible rural area, visit:

For income limits by state, visit:

*Income limits vary by both state and county


* InterLinc Mortgage Services, LLC. NMLS ID: 205696. InterLinc is an Equal Housing Lender. DISCLAIMER: This is not a commitment to lend. Credit and collateral are subject to approval. Other restrictions may apply. Programs, rates, terms and conditions are subject to change without notice.