Does a USDA loan really require no down payment?

Eligible borrowers can purchase with no down payment. Closing costs and prepaid expenses still apply, however, and some may be financed when program requirements and the appraised value allow. Your loan estimate will outline expected costs.

How do I know whether a home qualifies?

The property must be in an eligible rural area and meet USDA property standards. USDA’s eligibility map is a useful starting point, but final eligibility must be confirmed during the loan review. You must use the home as your primary residence.

What fees come with a USDA loan?

USDA Guaranteed loans include an upfront guarantee fee and an annual fee. The upfront fee may be financed under program rules. Closing costs and other expenses can also apply, so review your loan estimate for the full cost of your loan.

USDA MORTGAGES

Q: Are there income or credit requirements?

Yes. Your household’s adjusted annual income must fall within the applicable USDA limit. Income from adult household members may count even when they are not borrowers. The lender also reviews credit history, debts, documented income, and repayment ability.

LOAN PROGRAM

A no-down-payment option for eligible buyers purchasing a primary home in a qualifying rural area.

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Documentation Needed

Town Green Park

WHO IS A USDA MORTGAGE BEST FOR?

Homeownership Beyond The City

USDA Guaranteed mortgages help eligible households purchase a primary residence in a qualifying rural area. For qualified borrowers, no down payment is required. The property, household income, credit history and ability to repay must meet program and lender requirements.

Who is a USDA Mortgage Best For?

A USDA mortgage may fit a first-time or repeat buyer with reliable income who plans to live in an eligible home and meets the applicable household income limit. Income from adult household members may count even when they are not borrowers; exclusions and deductions apply.

Examples:

A buyer considering a home in a USDA-eligible rural community.
A household with stable income and manageable debts that wants to preserve savings rather than make a down payment.
A repeat buyer purchasing a principal residence who meets USDA household income and property requirements.

No down payment does not mean no costs. Closing costs, prepaid expenses, an upfront guarantee fee and an annual fee may apply. Financing some costs depends on program rules and appraised value. All loans are subject to eligibility and underwriting approval.

Check USDA Property Eligibility

Enter the property address on USDA’s official map. Map results are preliminary; final property eligibility is determined by USDA during the application review.

QUICK FACTS ABOUT USDA MORTGAGES

Credit score of 620 or above required by Legend Lending

No down payment for eligible buyers*

Household income limits apply

Debt ratio up to 43% generally acceptable to Legend Lending

Fixed-rate financing

Primary homes only

Upfront and annual guarantee fees

*No down payment does not mean no closing costs. Property, household income, credit and repayment eligibility apply. Fees, prepaid expenses and lender requirements vary. All financing is subject to underwriting approval.

Frequently asked questions

FROM THE BLOG

Helpful Tips & Local Insights

Sonya Bersani Mortgage Broker Lender The Woodlands Texas

Ready to take the next step?

Let’s review your homebuying goals, household income and the property you have in mind to see whether USDA financing may fit. I’ll explain the next steps, expected costs and documentation needed.

Sonya Bersani

Loan Originator, NMLS 140571
TREC CE Instructor 10623
Cell 267-934-2659
sonya.bersani@legendhomelending.com

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