The core requirements for a USDA loan
A USDA loan requires three things: you must buy a home in an area the USDA has designated as rural, your household income cannot exceed the limit set for your county, and you must be a U.S. citizen or permanent resident with a valid Social Security number. The property itself must be a single-family home you will live in — not an investment property, not a multi-unit building, and not a manufactured home built before June 1976.
You do not need a down payment. The USDA covers the full purchase price, which is the defining feature of the program. You do need a credit score, though the USDA does not publish a minimum — lenders typically want 580 or higher, but some will work with lower scores if you have compensating factors like steady employment or savings.
The income limit varies by county and by household size. A family of four in one county might have a limit of $90,000 while the same family in another county has a limit of $110,000. You can find your county's specific limit on the USDA Rural Development website by entering your address, or ask a lender to check for you.
Key Takeaways
- Your home must be in a USDA-designated rural area, which includes many towns of 10,000 to 20,000 people and some suburbs of larger cities.
- Your household income must fall below the limit for your county, which changes yearly and depends on family size.
- You must be a U.S. citizen or permanent resident with a valid Social Security number and a credit score of roughly 580 or higher.
- The property must be a single-family home you will occupy as your primary residence, built before June 1976 if it is manufactured.
- You pay no down payment, but you will pay a may provide fee (typically 2 to 3.5 percent of the loan amount) rolled into your mortgage.
How the USDA defines "rural" for loan purposes
Rural does not mean remote or farmland. The USDA considers an area rural if it has a population of 10,000 or fewer. This includes small towns, villages, and the outer edges of suburbs around larger cities. Some areas that feel suburban — with shopping centers and schools nearby — still may have access to because the specific census tract or zip code falls under the threshold.
The easiest way to check is to enter your address on the USDA Rural Development website's property may be able to access tool. It will tell you immediately whether the property qualifies. If the tool says no, the property does not may have access to for a USDA loan, and no exception process exists. If it says yes, you can move forward with a lender.
Properties in cities, incorporated towns over 10,000 people, and densely developed suburbs do not may have access to. If you are looking at a home near a city boundary, check the specific address rather than assuming based on how the area feels.
Income limits and how they are calculated
The USDA sets a maximum income for each county based on the area's median income. The limit is typically 115 percent of the county median for most borrowers. Your household income includes wages, self-employment income, Social Security, disability payments, child support, and other regular income sources. It does not include one-time payments like tax refunds or insurance settlements.
If you are self-employed, the USDA will average your income over the past two years. If you recently changed jobs, they will use your current income if it is higher, or average the past two years if that is higher. The goal is to reflect what you are likely to earn going forward.
Income limits change every year, usually in February. If you are close to the limit, ask your lender to confirm the current year's number for your county rather than relying on last year's figure. Some counties see increases; others see decreases.
Credit score and debt-to-income requirements
The USDA does not set a minimum credit score, but most lenders require 580 or higher. Some lenders will go lower if you have other strengths — a long employment history, significant savings, or a co-borrower with stronger credit. If your score is below 620, expect the lender to scrutinize your application more closely and possibly ask for a larger cash reserve after closing.
Your debt-to-income ratio — the percentage of your gross monthly income that goes to debt payments — typically cannot exceed 41 to 43 percent. This includes the new mortgage payment, property taxes, insurance, homeowners association fees, car loans, student loans, credit card minimums, and child support. Some lenders will go to 50 percent if you have compensating factors, but 43 percent is the standard ceiling.
The USDA may provide fee (the insurance premium for the lender) is usually 2 to 3.5 percent of the loan amount and gets rolled into your mortgage. This increases your monthly payment but does not require cash out of pocket at closing.
Citizenship and Social Security requirements
You must be a U.S. citizen or a permanent resident (green card holder). Temporary visa holders, undocumented immigrants, and people with deferred action status do not may have access to. The USDA will verify your status through E-Verify or by reviewing your green card.
You must have a valid Social Security number. If you are a permanent resident without a Social Security number, you will need to obtain one before applying. The Social Security Administration can issue one to permanent residents; it typically takes two to four weeks.
Property type and condition standards
The home must be a single-family dwelling — one unit only. Duplexes, townhouses, condos, and multi-family properties do not may have access to. The property must be your primary residence; you cannot use a USDA loan to buy a vacation home or rental property.
If the home is a manufactured home (mobile home), it must have been built on or after June 15, 1976, and must be permanently affixed to the land with a foundation. Older manufactured homes do not may have access to. The manufactured home must also meet HUD standards and be classified as real property, not personal property.
The home must pass a USDA appraisal and inspection. The property must be safe, sanitary, and in reasonable condition. Major structural problems, hazardous materials, or code violations can cause the appraisal to fail. If the home does not pass, the seller must make repairs before closing, or you can walk away without penalty.
Employment and income stability factors
The USDA wants to see stable income. If you have changed jobs in the past two years, the lender will ask for an explanation and may require a letter from your new employer confirming your position and salary. A job change within the same field or to a similar role is usually acceptable; a career change may raise questions.
If you have been unemployed in the past two years, the lender will want documentation of what you were doing during that time and proof that you are now employed. Gaps of a few weeks are normal and usually not a problem. Gaps of several months may require explanation or additional documentation.
If you are retired and living on Social Security or a pension, that income counts as stable. If you are receiving unemployment benefits, those typically count only if you have a job offer letter for employment starting within 30 days of closing.
Down payment and cash reserves
You do not need a down payment for a USDA loan — this is one of the program's main advantages. The USDA guarantees the full loan amount, so the lender takes no equity position. You will owe the full purchase price plus the may provide fee, but you pay nothing upfront.
Some lenders require cash reserves after closing — typically one to three months of mortgage payments in a savings account. This shows you can handle an emergency without defaulting. If your credit score is lower or your debt-to-income ratio is tight, the lender is more likely to require reserves. Ask your lender about their specific policy before you apply.
You can use a gift from a family member to cover closing costs, but you cannot borrow the down payment (which does not exist) or closing costs. The gift must be documented with a letter from the giver stating it is a gift, not a loan.
Frequently Asked Questions
Can I use a USDA loan to buy a home with my spouse if only one of us is a U.S. citizen?
No. Both borrowers must be U.S. citizens or permanent residents. If only one spouse qualifies, you can apply with just that person as the borrower, but the other spouse's income and debts still count toward the application. Some lenders will not allow a non-may have access to spouse on the loan at all.
What happens if my income goes over the limit after I am approved but before closing?
If your income exceeds the limit at the time of closing, the loan cannot close. Income is verified again just before closing. If you received a raise or bonus that pushes you over, you may need to wait until the next year's income limits are released (usually in February) to see if your county's limit increased. Otherwise, you would need to find a conventional loan instead.
Do I have to live in the home immediately after closing?
Yes. The USDA requires that you occupy the home as your primary residence within 60 days of closing. You cannot close on the home and rent it out while you live elsewhere. If you need to delay occupancy, you must discuss this with your lender before applying.
Can I buy a home that needs repairs with a USDA loan?
Only if the repairs are minor. The USDA appraisal must show the home is safe and sanitary. If the inspection finds significant problems — a failing roof, foundation cracks, electrical hazards — the seller must repair them before closing. The USDA does not offer a renovation loan like the FHA 203(k), so major rehab projects do not may have access to.
What if I have a bankruptcy or foreclosure on my credit report?
A bankruptcy must be discharged (closed) for at least three years before you can apply. A foreclosure must be at least three years old. If you have both, the waiting period is typically longer. The lender will also want to see that you have rebuilt credit since then — on-time payments, low balances, and no new delinquencies. Ask a lender to review your specific situation before you spend time house hunting.