The basic requirements for a USDA loan
USDA loans are for people buying homes in rural areas who meet income limits set by the U.S. Department of Agriculture. You do not need a down payment, but you must have a valid Social Security number, be a U.S. citizen or permanent resident, and have a steady income that covers the monthly payment. The USDA also checks your credit history — most lenders want a score of 580 or higher, though some accept lower scores.
The property itself has to be in a USDA-designated rural area. You can check whether your address qualifies on the USDA Rural Development website by entering your zip code. The home must be your primary residence, not a rental or investment property, and it cannot be a manufactured home built before June 1976.
Income limits vary by county and household size. A family of four in one county might be allowed to earn $90,000 a year, while the same family in another county has a limit of $110,000. You can find your county's specific limits on the USDA website, organized by state and county.
Key Takeaways
- You must live in a USDA-designated rural area, which you can verify by zip code on the USDA Rural Development website.
- Your household income cannot exceed the limit for your county, and limits vary significantly by location and family size.
- You need a credit score of at least 580 (most lenders' standard), a valid Social Security number, and proof of U.S. citizenship or permanent residency.
- The home must be your primary residence, built after June 1976 if it is a manufactured home, and you must have enough income to cover the monthly payment plus property taxes and insurance.
Income limits and how they are calculated
The USDA sets a maximum income for each county based on the area's median income. That limit is usually 115 percent of the county median for most borrowers, though some programs allow up to 150 percent for rural communities with higher costs of living. Your household income includes wages, self-employment income, Social Security, pensions, and child support you receive — but not child support you pay.
If you are self-employed, the USDA typically looks at your average income over the past two years. You will need to provide tax returns and possibly a profit-and-loss statement. If your income is seasonal or has changed recently, the lender may average it differently or ask for additional documentation.
Income limits reset each year on April 1st. If you are close to the limit, check the current year's numbers before you apply, because a change in the limit could affect whether you are within range. The USDA publishes these limits on its website, organized by state and county.
Credit score and debt-to-income requirements
Most USDA lenders require a credit score of 580 or higher, though some will work with scores as low as 500 if you have compensating factors — such as a larger down payment (even though USDA loans do not require one) or a co-signer. A score below 580 makes approval harder but not impossible; you will need to shop around and be prepared to explain any negative marks on your credit report.
The USDA also looks at your debt-to-income ratio, which is the percentage of your monthly income that goes to debt payments. Most lenders want this ratio to be no higher than 41 to 43 percent, though some allow up to 50 percent if other factors are strong. Your debt includes car loans, credit cards, student loans, child support, and the new mortgage payment.
If you have missed payments, collections accounts, or a recent bankruptcy, you may still be considered, but the lender will want to see evidence that your finances have stabilized. A bankruptcy discharged more than three years ago is easier to overcome than one from last year.
Citizenship and residency status
You must be a U.S. citizen or a permanent resident (green card holder) to get a USDA loan. The lender will ask for proof, usually a birth certificate or passport for citizens, or a green card for permanent residents. If you are a permanent resident, you will also need a valid Social Security number.
Temporary visa holders, refugees, and asylees do not meet the citizenship requirement, even if they have a Social Security number or work authorization. Some state or local programs may have different rules, but the federal USDA program itself requires citizenship or permanent residency.
Property location and type restrictions
The property must be in a USDA-designated rural area. The USDA defines rural differently than most people do — some areas that feel suburban are rural by USDA standards, and some areas that feel rural are not. The only way to know is to check your specific address on the USDA Rural Development website. Enter your zip code or street address, and the system will tell you whether the property is in an may be able to access area.
The home must be your primary residence, meaning you will live there most of the year. You cannot use a USDA loan to buy a second home, vacation property, or rental property. If you move and rent out the home later, you may be required to refinance into a different loan type.
Manufactured homes are allowed only if they were built after June 1976 and are permanently affixed to the land. Mobile homes, modular homes, and homes on leased land do not meet USDA requirements. The home also cannot be part of a homeowners association with mandatory fees, though voluntary associations are usually acceptable.
Employment and income stability
The USDA wants to see that your income is stable and likely to continue. If you have been at your current job for less than two years, the lender will ask for a letter from your employer stating that your position is permanent and your income is expected to continue. If you changed jobs recently, you may need to explain the change and show that your new income is equal to or higher than your previous income.
If you are retired and living on Social Security or a pension, that income counts as stable. If you receive disability benefits, those also count. The lender will verify income directly with the source — your employer, the Social Security Administration, or your pension provider — so you do not need to worry about proving it yourself beyond providing the documents the lender requests.
If you have been unemployed in the past two years, the lender will want to know the reason and the length of the gap. A short gap due to a job change is usually not a problem. A longer gap may require explanation or additional documentation showing that you are now stably employed.
Co-signer and credit history considerations
You do not need a co-signer to get a USDA loan, but having one can help if your credit score is low or your debt-to-income ratio is tight. A co-signer is legally responsible for the loan if you cannot pay, so the lender will check their credit and income just as carefully as yours. The co-signer does not have to live in the home, but they must be a U.S. citizen or permanent resident.
If you have negative items on your credit report — late payments, collections, charge-offs, or a bankruptcy — the lender will look at how recent they are and whether you have since established a pattern of on-time payments. A late payment from five years ago is easier to overcome than one from six months ago. A bankruptcy from more than three years ago is generally less of a barrier than a recent one.
If you have no credit history at all, some lenders will work with you using alternative credit, such as a history of on-time rent payments, utility payments, or insurance payments. You will need to provide documentation of these payments, usually covering at least 12 months.
Frequently Asked Questions
Can I get a USDA loan if I have bad credit?
Most lenders require a credit score of 580 or higher, but some will consider scores as low as 500 if you have other strengths, such as a stable job or a co-signer. If your score is below 580, contact multiple lenders to find one willing to work with you. Be prepared to explain any negative marks on your report.
What counts as rural for USDA loan purposes?
The USDA's definition of rural does not match common usage. Some suburbs may have access to, and some areas that feel rural do not. Check your specific address on the USDA Rural Development website by entering your zip code or street address. That is the only reliable way to know.
Do I have to be a U.S. citizen to get a USDA loan?
You must be a U.S. citizen or a permanent resident (green card holder). Temporary visa holders, refugees, and asylees do not meet the requirement, even if they have a Social Security number or work authorization.
What if my income is seasonal or self-employed?
The USDA typically averages self-employed and seasonal income over the past two years using your tax returns. You will need to provide documentation of this income, and the lender may ask for additional proof if your income has changed significantly year to year.
Can I use a USDA loan to buy a rental property or second home?
No. The home must be your primary residence, where you will live most of the year. You cannot use a USDA loan for investment properties, vacation homes, or second homes.