What Is USDA Rural Development? Can I Really Buy a House with $0 Down Using a Rural Development Loan?

If you’re looking to build a new home or buy a new or existing home in a rural or suburban area, you may want to check with your lender to see if you qualify for a USDA Rural Development loan. This loan is extremely attractive to homebuyers, especially first-time homebuyers who have low to moderate incomes. It allows 100 percent financing with no down payment needed whatsoever.

What Are the USDA Loan Requirements?

A Rural Development Loan is a special type of home mortgage that’s administered by the United States Department of Agriculture (USDA). There are a variety of requirements for this type of USDA loan, including:

  • The home must be a single-family dwelling.
  • The home must serve as the borrower’s primary residence. Thus, it can’t be an income-producing property such as a rental home.
  • The USDA RD borrower must be a US citizen, a non-citizen national, or a Qualified Alien.
  • The combined gross annual household income of the borrower must not exceed 115% of the median household income for your state and county. You can find this income maximum by visiting this page on the USDA Rural Development loan website.
  • The property must be in a qualified rural or suburban area. You can confirm whether or not the house you want to buy is in an area zoned for Rural Development loans on this USDA eligibility page.

(READ: Urban vs Suburban Living: Which One Is Best for You?)

Why Should I Consider a Rural Development Loan?

There are a variety of reasons why home buyers like you choose to get a Rural Development Loan for a USDA rural housing, including:

  • USDA Rural Development loans offer financing to people with lower to moderate household income levels.
  • Rural Development loans make homeownership more accessible by allowing homebuyers to purchase a home with zero down.
  • With a Rural Development loan, there are no minimum credit requirements, which means that homebuyers with low credit scores can still purchase a home.

How to Find a Rural Development Loan Lender

We know it takes a lot of effort to find the perfect lender for your next home. That’s why we’ve created our website – to make finding a loan easier.

To be matched with a lender who services your area, fill out our online quote form today.