Why does USDA Rural Development offer home loans?

This USDA program helps mortgage lenders work with low and moderate income families living in rural areas to make homeownership a reality. Per the USDA, providing affordable homeownership opportunities through the rural development (RD) home loan program promotes prosperity, which in turn creates thriving communities and improves the quality of life in rural areas.

USDA RD Loan Features

  • 100% financing (zero money down)
  • Can be used to purchase your primary residence or refinance for rate term
  • Expanded qualifying ratios and flexible credit guidelines
  • Must be deemed eligible rural area by USDA  (check USDA RD eligibility)
  • Income limits based upon the number of people living in house, varies by geographical area
  • Loan up to appraisal value to finance closing costs
  • RD Guarantee fee of 1% (Financeable)