What is a USDA loan?
A USDA loan is a zero-down mortgage backed by the U.S. Department of Agriculture, designed to help low- and moderate-income families buy in eligible rural and suburban areas.
Because the USDA guarantees the loan, private lenders can offer 0% down with below-market mortgage insurance. The annual MIP is about 0.35% — lower than FHA — and there is no separate monthly PMI. The trade-off is geography: the home must be in a USDA-eligible area, and your household income must be at or below 115% of the area median.
There are two flavors: the Guaranteed Loan (the common one, issued by private lenders) and the Direct Loan (issued by USDA itself, for very low-income borrowers, with subsidized rates). Most buyers use the Guaranteed program.
USDA at a glance
USDA loans: did you know?
A few facts that surprise buyers comparing USDA to FHA and conventional.
0% down is real
USDA is the only government-backed loan with zero down for non-veterans. You can finance 100% of the appraised value — closing costs can even be rolled in if the appraisal supports it.
Cheaper insurance than FHA
USDA annual MIP is about 0.35%, vs FHA at 0.55%. And unlike FHA, there is no separate monthly PMI on top of it.
Suburban, not just rural
USDA-eligible areas include suburbs of Houston, Dallas, Austin, Orlando, and Tampa. Any area with under 35,000 population can qualify — you do not have to buy a farm.
Income is a ceiling, not a floor
USDA caps income at 115% of AMI — so it is built for working families, not just low-income. Many two-income households qualify in eligible areas.
Two programs, one goal
The Guaranteed Loan (private lender, most common) and the Direct Loan (USDA-issued, for very low income, with subsidized rates as low as 1%).
Closing costs can be covered
Seller concessions up to 6% and USDA-compatible down payment assistance can cover closing costs — so a near $0-out-of-pocket purchase is possible.
USDA Payment Calculator
0% down, with the 1% guarantee fee financed in and the 0.35% annual MIP included. See your true monthly payment on a USDA-eligible home.
Monthly Payment Calculator
Choose your loan program. Minimum down payment and daily rate adjust automatically.
Loan Program
⚠ PMI/MIP will be added (less than 20% down).
Estimated Monthly Payment
$2,565
PITI + PMI/MIP
- Principal & Interest
- Property Tax
- Insurance
- PMI/MIP
Who a USDA loan fits best
- Buyers with steady income but little savings for a down payment, shopping in eligible suburban or rural areas.
- Households at or below 115% of area median income — including many two-income families.
- People buying outside the dense urban core of Houston, Dallas, Austin, Orlando, or Tampa, where USDA-eligible areas begin.
- Anyone who wants 0% down without being a veteran — the only non-VA path to zero down.
- Buyers who can cover closing costs with seller concessions or DPA, making a near $0-out-of-pocket purchase possible.
USDA loan FAQ
Most areas outside the dense urban core qualify — including many Houston, Dallas, Austin, San Antonio, Orlando, and Tampa suburbs. Any census area with under 35,000 population can be eligible. Use the USDA eligibility map or ask us to check your address.
Educational content only. This page is not financial, legal, or tax advice, a commitment to lend, or an offer of credit. Program requirements and terms vary by lender and change over time; figures cited reflect the sources below as of the dates noted, and eligibility always depends on your full financial profile. Liuver Duran, NMLS #2579601. Sociable Mortgage LLC, NMLS #2498240. Equal Housing Opportunity.