No money down
For starters, a USDA loan is one of the only loan programs offered to the general public that allows you to finance 100% of your home’s value. That means no down payment of any kind!
USDA Loans Guidelines
(Updated as of 12/03/2024)
USDA Rural Loans Guidelines
USDA Rural Development home loans, or USDA loans, are primarily designed for moderate-income households to purchase homes in eligible areas. The funds can also be used for building, repairing, renovating, or relocating a home, or for purchasing and preparing sites, including providing water and sewage facilities. However, finding a lender willing to take on some of these options may be challenging.
USDA home loans are available in all 50 states, as well as the Virgin Islands, Western Pacific, and Puerto Rico. The general guidelines for the loan program are consistent across all eligible areas. Be sure to check with an USDA-approved lender to confirm coverage in your area.
There are two types of USDA loans: the Direct Loan Program, administered through your local USDA service center for low-income households, and the 502 Guaranteed Program, designed for average-income households. The 502 Guaranteed loans are offered by lenders and banks and are insured through the USDA’s Rural Development program.
What are the terms?
USDA Loan Terms & Eligibility
To qualify for a USDA loan, the home must be located in an area designated as eligible by the USDA. You can check location eligibility on the USDA eligibility page here. Applicants may have an income of up to 115% of the median income for the area they wish to purchase in. State and county income limits can be found on our state pages USDA home loan state and income information for USDA home loan state and income information.
Applicants must be able to afford the housing payment, which includes taxes and homeowners insurance, meet reasonable credit requirements, and not own a home by the closing date.
USDA loans offer a 30-year mortgage with competitive interest rates, often lower than other loans on the market. There is no maximum loan amount, and the loan is subject to a yearly fee of 0.35% of the loan amount, paid in 12 monthly installments.
USDA Home Loan Features
Great interest rates
USDA loans are made even more affordable through very competitive fixed interest rates, ensuring your payments will not increase every month.
Need a 620 credit score
USDA Loans .Net requires a middle credit score of at least 620. If you are close, apply and we can help.
Affordable 30 year terms
USDA home loans also offers affordable 30 year terms. If you are a first time home buyer, or not, a USDA loan is the perfect fit.
Roll in your closing costs
A USDA loan allows you to finance in your closing costs up to the appraised value. Making the USDA loan the only mortgage on the market with this ability.
Apply today
Start your USDA Loan now! It only takes 30 seconds to see if you qualify.
USDA Loan Information
How do I get approved?
USDA Loan Approval
To qualify for a USDA loan, the applicant’s middle credit score must be at least 620. The standard debt-to-income (DTI) ratios for USDA home loans are 29% for housing expenses and 41% for total monthly debt. However, the maximum allowable DTI ratios are 34% for housing expenses and 46% for total debt. USDA may accept higher DTI ratios with compensating factors.
While there are no specific limits on the number of applicants per loan, non-occupying co-borrowers are not permitted. All applicants must prove that the property will be their primary residence. The credit report must show at least two accounts that have been open for 12 months, though these accounts can be either open or closed. There are alternative methods to qualify for credit as well. Please contact us for more details.
What are the requirements?
USDA Loan Standards
The USDA’s Rural Development home loan program requires that the home being purchased meets the HUD Handbook guidelines 4150.2 and 4905.1, which are standard for government-backed loans. Any issues with the home that would affect safety or livability must be addressed; however, if the home meets these standards, there should be no concerns.
For manufactured homes, they must be permanently installed and comply with HUD Manufactured Housing Construction and Safety Standards, as well as HCFP thermal and site standards. Existing manufactured homes can only be financed if they are currently financed through a USDA loan or are Real Estate Owned (REO) properties previously secured by a USDA loan. Note that finding lenders willing to finance manufactured housing can be challenging.
USDA Loan Handbook
New Applicants: For questions about a mortgage application currently in process, please reach out to your Mortgage Loan Officer. If you are not sure who your Mortgage Loan Officer is, please email our Mortgage Help Desk at mortgagehelpdesk@magnoliabank.com. Customer Feedback: For complaints or to provide feedback, please email complaints@magnoliabank.com.
This communication does not constitute a commitment to lend or the guarantee of a special interest rate. All loan programs and availability of cash proceeds are subject to credit, underwriting and property approval.
