What Is a USDA Loan?
A USDA loan is a government-backed mortgage that helps low- to moderate-income buyers. It offers:
- No down payment
- Low interest rates
- Reduced mortgage insurance
It’s designed for people who are buying in approved rural or suburban areas.
1. Your Property Must Be in a USDA-Eligible Area
Not every home qualifies. Your future home must be in a location approved by the USDA.
How to check:
- Use the USDA Eligibility Map
- Enter the exact address
- See if it qualifies
These areas aren’t just farms. Many quiet suburban neighborhoods count.
If you’re buying in California, Oregon, Washington, or Hawaii, Estar Mortgage can help you search fast.
2. Your Income Must Fall Within USDA Limits
USDA loans have income caps. You can’t earn more than a set amount for your area.
In 2025:
- Most areas: $110,650 max for a household of 1–4
- High-cost areas: Up to $146,050 or more
The USDA counts everyone’s income in your household, even if only one person applies.
You can subtract:
- Childcare expenses
- Medical bills (in some cases)
- Certain dependent allowances
If your income is close to the limit, Estar Mortgage can review it line by line to help you qualify.
3. You Need a Stable Income
USDA lenders want to see reliable income. You’ll need to show:
- Two years of consistent employment or income
- Paystubs and W-2s (or tax returns if self-employed)
- A reasonable debt-to-income ratio (typically 41% or less)
Don’t guess—use an income calculator or ask your lender.
4. Your Credit Score Should Be 640 or Higher
A 640 credit score makes the process easier. You may still qualify with a lower score, but it takes more documentation.
Lenders will look at:
- Payment history
- Debt levels
- Any bankruptcies or late payments
Estar Mortgage offers free credit checks and can help you build a plan to get to 640+.
5. The Home Must Meet USDA Guidelines
You can’t buy a fixer-upper or a luxury home with a USDA loan. The property must be:
- Modest in size and cost
- Safe and in livable condition
- Your primary residence
No vacation homes. No rentals. No pools. The house must meet basic standards for safety and structure.
Eligible properties include:
- Single-family homes
- Some condos and townhomes
- Certain manufactured homes (if built after 2006 and permanently installed)
6. You Must Be a U.S. Citizen or Legal Resident
You need to be a:
- U.S. citizen
- U.S. national
- Legal permanent resident (with valid documentation)
What USDA Loans Don’t Cover
- Investment properties
- Homes in major cities
- Second homes
- High-value or luxury homes
USDA loans are for people who plan to live full-time in the home they’re buying.
What Are the Benefits?
Here’s how USDA loans help you buy smarter:
- No down payment required
- Lower interest rates than most conventional loans
- Reduced monthly mortgage insurance
- Flexible credit standards
- You can finance 100% of the home’s value
These benefits make homeownership possible when other loans might not.
Real Example
Jason and Maria, a couple in Washington state, earned $105,000 combined. They wanted a home in a quiet town near Tacoma.
A conventional loan required 5% down—$25,000 on a $500,000 home. They didn’t have it.
Estar Mortgage helped them find a USDA-eligible home and qualify with no money down. They closed in 38 days.
What You Need to Apply
Here’s what to gather before you apply:
- Government-issued ID
- Proof of income (W-2s, paystubs, or tax returns)
- Bank statements
- Credit report (your lender will pull this)
- Address of the home you want to buy
Estar Mortgage helps you stay organized from start to finish.
FAQs
Can I get a USDA loan if I already own a home?
Yes, but you must sell your current home before closing unless you can prove hardship.
Can I use gift funds for closing costs?
Yes, USDA allows gift funds from family or approved sources.
What are USDA closing costs?
Expect 2% to 5% of the purchase price. You can roll them into the loan or negotiate with the seller.
Can I refinance with a USDA loan later?
Yes. USDA offers streamlined refinance options for existing borrowers.
How long does the USDA process take?
On average, 30 to 45 days. Estar Mortgage keeps your file moving to avoid delays.
Next Step: Check Your Eligibility Today
If you’re buying a home in a qualifying area and meet the income limits, a USDA loan might be right for you.
Let Estar Mortgage check your address, income, and credit. You could be pre-qualified in less than a day.
Ready to find out?
Contact Estar Mortgage now and take the first step toward homeownership with zero down.