USDA Loans

What areas qualify for USDA loans?

USDA-eligible areas include most locations outside of major metropolitan centers. Many suburban communities, small towns, and rural areas qualify. You might be surprised — about 97% of the U.S. land mass is USDA-eligible. You can check specific addresses using the USDA eligibility map tool, or ask your loan officer to verify.

What are the income limits for USDA loans?

Household income cannot exceed 115% of the area median income (AMI). This limit applies to all adults in the household, not just the borrowers on the loan. Income limits vary by county and household size. For example, a family of four in many areas can earn up to approximately $110,650 and still qualify.

Is there mortgage insurance on USDA loans?

USDA loans have a guarantee fee instead of traditional mortgage insurance. There is an upfront guarantee fee of 1% of the loan amount (which can be financed) and an annual fee of 0.35% paid monthly. These fees are significantly lower than FHA mortgage insurance premiums, making USDA loans one of the most affordable options available.

Can I use a USDA loan for a new construction home?

Yes. USDA loans can be used for new construction if the home is in an eligible area and you meet income requirements. The construction must be completed by a licensed contractor, and the home must meet USDA property standards. Single-close construction-to-permanent USDA loans are available through some lenders.

How long does a USDA loan take to close?

USDA loans typically take 30 to 45 days to close, similar to other government loans. However, they may take slightly longer because the loan requires approval from both the lender and the USDA itself. Working with an experienced USDA lender like Xpert Home Lending can help streamline the process.