< Back to News & Insights
What is a USDA Loan?
August 10, 2018 — 3 min read
You may feel more comfortable surrounded by pastures than pavement. If so, buying a home may be within reach, thanks to the U.S. Department of Agriculture's (USDA) mortgage program. In fact, the USDA might have one of the government's least-known, but most cost-effective home buying programs in the marketplace today.
The USDA loan is a $0 down payment, 100% financing home mortgage option available to homebuyers searching for their dream home in rural and suburban areas. Don't let its name fool you, this program could be for anyone looking for a home outside of a downtown core or major metro area. In fact, 97% of U.S. land mass is eligible for USDA* financing. This represents 109 million people, and about one-third of the U.S. population. It's very likely that a property near you qualifies.
How USDA Loans Work
The USDA believes "providing affordable homeownership opportunities promotes prosperity, which in turn creates thriving communities and improves the quality of life in rural areas." Together, PRM and the USDA purposefully provide low-to-moderate income households an opportunity to achieve the dream of homeownership in eligible rural and suburban areas. To do this, the USDA guarantees USDA loans against default so that we can provide you with amazing benefits, like $0 down payment, low interest rates, and lenient credit requirements. USDA loans have unique guidelines and requirements that are best handled by a lender with both experience and your best interest at heart. We will handle everything from pre-approval to closing. USDA will put their final stamp of approval on the loan, and we will guide you through the rest.
Qualifying for a USDA Loan
Qualifying for a USDA loan is easier than for many other loan types since the loan doesn't require a down payment or a high credit score. At a minimum, the USDA requires:- U.S. citizenship or permanent residency
- Dependable income, typically two consecutive years
- The ability and willingness to repay the mortgage - generally no late payments or collections 12 months before the application
- An acceptable debt ratio, which can vary by lender and other factors
- The homebuyer cannot make more than 115% of the area median income.
*Some state and county maximum loan amount restrictions may apply.
Keywords:
Categories
Archives
Recent Posts
- The Gift of Homeownership: How to Help a Loved One on Their Journey
- Empowering Veterans: The Role of VA Loans in Post-Service Life
- Jingle All the Way to Debt-Free Living: How Debt Consolidation Helps Homeowners
- Mortgages for Heroes: The Veteran’s Essential Guide to Homeownership
- How Would a Recession Impact Home Value? The Silver Lining for Buyers
- Boo-lieve it or Not: The Haunting Truth About 30-Year Fixed Mortgages
Getting started >
You bring the dream. We'll bring the diagram.
There’s a financing solution for just about every situation.
What our clients say >
I felt like I was treated like family, great communication and helping me with any questions I had.
Getting started >

You bring the dream. We'll bring the diagram.
There’s a financing solution for just about every situation.
Find an advisor >
Where does your sun shine? Find your local advisor.
Enter your city or state to see advisors near you.
Careers at PacRes>
We’re growing. Grow with us.
Careers at PacRes reward excellence in mortgage banking.
Build a better tomorrow