The main requirements for a USDA loan
A USDA loan requires four things: a property in an may be able to access rural area, a household income at or below the area limit, a credit score of at least 580 (though 640 is more common in practice), and the ability to document steady income. You do not need a down payment, but you do need to show a lender that you can repay the mortgage. The USDA does not make the loan itself — a bank or mortgage company does, and the USDA guarantees part of it if you default.
The income limit is the hardest requirement to understand because it changes by county and by household size. A family of four in one county might earn $90,000 and still be under the limit, while the same family in another county might be over it. Your lender can tell you the exact limit for your address and family size in minutes. Income includes wages, self-employment, Social Security, disability payments, and child support — basically any money that comes in regularly.
Your credit score matters, but it is not the only thing lenders look at. A score below 580 disqualifies you from most USDA lenders, but between 580 and 620 you may find lenders willing to work with you if your income is stable and you have not missed recent payments. Above 620, you have more options and better rates.
Key Takeaways
- The property must be in a USDA-may be able to access rural area, which includes many suburbs and small towns but not major cities — your lender can check the address instantly.
- Your household income must be at or below the limit for your county and family size, and this limit varies widely by location.
- A credit score of 580 or higher is the minimum, though most lenders prefer 640 or above and will look at your payment history over the past two years.
- You must show steady income through tax returns, W-2s, or pay stubs, and self-employed borrowers need two years of tax returns.
- You do not need a down payment, but you do need to afford the monthly payment, property taxes, insurance, and HOA fees if they apply.
Income limits and how they work
The USDA sets income limits by county and updates them each year, usually in February. The limit for a family of four in a rural county might be $85,000, while a family of two in the same county might have a limit of $60,000. These numbers are not arbitrary — they are based on the median income for that area, and the USDA typically sets the limit at 115% of the area median income.
Income includes your gross wages before taxes, but also rental income, Social Security, pensions, disability payments, alimony, and child support. If you are self-employed, the USDA looks at your net income (after business expenses) from your last two years of tax returns. If you just started a business or changed jobs, you may need to wait until you have two years of history, or your lender may average your old and new income.
The income limit applies to your entire household, not just the borrower. If you are married and both work, both incomes count. If an adult child lives with you and works, their income counts too. This can push you over the limit, but it can also help if you are close to may have access to and need to add a co-borrower's income.
Credit score and payment history requirements
The USDA's official minimum credit score is 580, but in practice most lenders require 620 or higher. A score of 580 to 619 is possible but means fewer lenders will work with you, and you may pay a higher interest rate. Above 620, you have more options and better pricing.
Lenders do not just look at your score — they also look at what caused it. A score of 600 with one missed payment five years ago is stronger than a score of 600 with a missed payment last year. The USDA allows lenders to overlook older negative marks, but recent ones (within the last two years) are harder to explain away. If you had a medical debt sent to collections three years ago but have paid everything on time since, you have a real chance. If you missed a credit card payment six months ago, most lenders will decline you.
Bankruptcy is not automatic disqualification. The USDA allows borrowers to apply two years after a Chapter 7 discharge or one year after a Chapter 13 if you have made all payments on time since filing. A foreclosure requires three years to pass before you can borrow again.
Property location and rural area may be able to access
The property must be in a USDA-may be able to access rural area. This sounds restrictive, but it covers far more land than most people think — roughly 97% of U.S. land is may be able to access, including many suburbs and small towns. The USDA excludes only the core of major metropolitan areas. If you are looking at a property within 30 miles of a major city, it might still be may be able to access.
You cannot check this yourself reliably — the USDA's online map is a starting point but often wrong. Your lender checks the exact address against the USDA's current database, and that is the definitive answer. If a property is ineligible, no USDA lender can make the loan, so this is worth confirming before you make an offer.
The property itself must be a single-family home, a duplex, triplex, or fourplex. Condos are may be able to access only if the project is USDA-approved, which most are not. Mobile homes are may be able to access if they are on land you own and meet USDA construction standards. Investment properties and vacation homes do not may have access to — the home must be your primary residence.
Debt-to-income ratio and monthly payment capacity
The USDA looks at your debt-to-income ratio, which is your total monthly debt payments divided by your gross monthly income. The maximum is usually 41% to 43%, though some lenders go higher for strong borrowers. This includes the new mortgage payment, car loans, credit cards, student loans, child support, and any other debt that appears on your credit report.
The mortgage payment itself includes principal, interest, property taxes, homeowners insurance, and the USDA may provide fee (which is rolled into the loan). If you have an HOA, that counts too. A lender will calculate this for you, but you can estimate it: a $200,000 loan at 7% interest over 30 years costs roughly $1,330 per month in principal and interest alone, plus taxes and insurance.
If your debt-to-income ratio is too high, you have a few options. You can pay down existing debt before applying — even paying off a car loan can free up enough monthly payment room to may have access to. You can increase your income if you have a job offer or a raise coming. Or you can look at a lower purchase price. Some lenders are more flexible than others, so if one declines you, another might approve you.
Documentation you will need to gather
Lenders need proof of income, assets, and identity. For employment income, bring your last two years of tax returns and your most recent pay stubs (usually the last 30 days). If you are self-employed, you need two years of complete tax returns including Schedule C, and possibly a profit-and-loss statement for the current year if you are applying early in the year.
You will also need bank statements (usually the last two months) to show you have money for closing costs and reserves. The USDA does not require reserves, but lenders often do. Bring your Social Security card, driver's license, and proof of residency. If you have been divorced, bring the divorce decree. If you have had a bankruptcy or foreclosure, bring the discharge papers or deed in lieu.
For the property itself, you need a purchase agreement or contract. The lender will order an appraisal and a title search. You do not order these — the lender does — but you pay for them as part of closing costs.
Self-employment income and irregular earnings
If you are self-employed, the USDA requires two years of tax returns to prove your income is stable. The lender will average your income over those two years, or use the lower year if it is trending down. If you just started a business, you cannot use USDA financing yet — you need to wait until you have two years of history.
If you changed jobs or started a second job recently, the lender may average your old and new income, or they may use only the new income if it is higher and you have an offer letter. Seasonal work (like construction or agriculture) is treated the same way — the lender averages over two years to smooth out the ups and downs.
Rental income from a property you own counts, but only if you have owned it for two years and have tax returns to prove it. If you are about to inherit property or receive a gift, that does not count as income yet. Gifts of money for down payment or closing costs are allowed, but the gift giver cannot expect repayment — the lender will ask for a gift letter stating this.
Co-borrowers and joint applications
You can apply with a spouse, family member, or anyone else as a co-borrower. Both of your incomes count toward the income limit, and both of your credit scores matter. If one of you has a weak credit score, the lender may use the lower score to may have access to you, or they may require the weaker borrower to be removed from the loan.
A co-borrower is not the same as a co-signer. A co-borrower is on the deed and the mortgage, and their income and credit are part of the application. A co-signer is only on the mortgage and does not own the home — most USDA lenders do not allow co-signers, only co-borrowers.
If you are applying with a spouse, both of your incomes and debts are included. If one spouse has significant debt or a low credit score, it can hurt your chances. In some cases, it is better to apply with only one spouse as the borrower, though this means only one income counts and only one person owns the home.
Frequently Asked Questions
Can I get a USDA loan if I have had a bankruptcy?
Yes, but you must wait. After a Chapter 7 bankruptcy discharge, you can apply after two years have passed. After a Chapter 13, you can apply after one year if you have made all payments on time. The lender will want to see that you have rebuilt credit since the discharge — on-time payments and low credit card balances help.
What if my income is slightly over the limit?
You do not may have access to. The USDA income limit is a hard ceiling, not a guideline. If your household income is $1 over the limit, you cannot get a USDA loan. However, income limits change each year, so if you are close, you can check again next year. Also, some income (like child support you receive) may not count depending on how long you expect to receive it.
Do I need a down payment for a USDA loan?
No. The USDA loan requires zero down payment, which is one of its main advantages. You do need to pay closing costs, which typically run 2% to 5% of the loan amount. Some lenders allow you to roll closing costs into the loan, though this increases your monthly payment.
How long does the approval process take?
From application to closing usually takes 30 to 45 days, though it can be faster or slower depending on how quickly you provide documents and how busy the lender is. The appraisal and title search add time. If the property does not appraise high enough or the title has issues, approval can be delayed or denied.
Can I use a USDA loan to buy a mobile home?
Yes, if the mobile home is on land you own and meets USDA construction standards (usually homes built after 1976). If you are buying a mobile home in a park where you rent the lot, you cannot use a USDA loan. The USDA requires you to own the land under the home.