Definition
USDA loans are mortgages for rural properties available to qualified buyers in rural areas (typically under 10,000 population). They require no down payment, no mortgage insurance upfront, and offer flexible credit standards.
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USDA loans target rural development and are available for qualifying properties in rural areas and small towns (not suburbs of major cities). Income limits apply and are typically 80-115% of area median income. USDA loans require annual insurance fees but offer flexibility on credit scores and DTI.
Pro Tip
USDA loans are excellent for rural homebuyers; check if your property qualifies on the USDA website before pursuing other loan types.
Example
A buyer in a qualified rural area with income under the USDA limit can purchase a $350,000 home with zero down payment and USDA backing.