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USDA Home Loans — 0% Down for Rural & Small‑Town Buyers
Buy with confidence. If the home you love is in a USDA‑eligible area, you could qualify for 100% financing with a competitive fixed rate and low monthly costs—no large down payment required.
Why Choose a USDA Loan?
- $0 down payment for many qualified buyers in eligible areas—keep more cash for closing, upgrades, and life.
- Competitive fixed rates through approved lenders, backed by a USDA guarantee that reduces lender risk.
- Lower monthly costs vs. many alternatives, thanks to program‑specific fees (set yearly) that often beat typical mortgage insurance. (Ask your lender for current fee schedules.)
- Great for first‑time and repeat buyers seeking modest, safe, and livable homes in rural or small‑town communities.
Who Qualifies? (At‑a‑Glance)
USDA Guaranteed (Section 502) focuses on low‑to‑moderate income households purchasing a primary residence in a USDA‑eligible area:
- Income: Generally, ≤ 115% of Area Median Income (AMI) for your household size.
- Location: Home must be inside the USDA‑defined rural boundary—use the official map to verify.
- Occupancy: You’ll live in the home as your primary residence.
- Credit & DTI: Lenders often prefer ~640+ for automated approvals; lower scores may be eligible via manual underwriting. Typical manual caps use 29% PITI / 41% total debt as guideposts. (Lender overlays vary—ask your loan officer.)
Not sure if your target town qualifies? Many areas outside major metros do—verify any address instantly with the USDA tool.
Is Your Home Eligible? (Instant Check)
- Click Check Property Eligibility
- Enter the exact address or explore by map to confirm eligibility.
- If eligible, save the result and share it with your Sold & Sunset agent to fast‑track pre‑approval.
USDA vs. FHA vs. Conventional vs. VA (Quick Compare)
Loan Type
USDA
FHA
Conventional
VA
Down Payment
$0 down
Low (typically 3.5%)
3–20% down
$0 down
Key Requirements
Location & income limits; primary residence
Broader credit flexibility
Standard credit & income
Eligible service members & veterans
Highlights
Competitive fixed rates via approved lenders
Mortgage insurance required for most loans
PMI can be canceled at 20% equity; broader property types
No PMI; strong benefits for military borrowers
How the Process Works (Step‑by‑Step)
- Verify property eligibility (USDA map).
- Get pre‑qualified with a USDA‑approved lender (income, credit, DTI check).
- Search smarter in eligible communities; line up modest, safe, livable homes that meet program standards.
- Make an offer and complete underwriting (lender sets rate/terms; USDA provides guarantee to lender).
- Close at 0% down (when eligible). Move in and enjoy your home
What You’ll Need
1
Government‑issued ID & Social Security number
2
Income verification (W‑2s, pay stubs, tax returns; award letters if applicable)
3
Asset statements (bank/investment)
4
Credit & residence history
5
Purchase contract & property details
Plan Your Payment (Fast & Transparent)
Use the Sold & Sunset Mortgage Calculator to estimate monthly principal & interest, taxes, homeowners' insurance, HOA dues, and program‑specific fees. Adjust terms and down payment to compare scenarios. (Your lender will quote current USDA fees/rates.)Frequently Asked Questions
Is there a USDA loan limit?
USDA Guaranteed loans don’t use a single national “loan limit” the way conforming loans do. Your maximum is driven by ability to repay, property value, and program rules. Ask your lender for your cap and current fee schedule.
Can closing costs or the upfront guarantee fee be financed?
Often, yes—subject to appraised value and program rules. Lenders can typically roll the upfront guarantee fee into the loan amount. Annual fees are usually included in your monthly payment.
Do I have to be a first‑time buyer?
No. USDA targets low‑to‑moderate income buyers in eligible areas, regardless of whether it’s your first purchase. Primary residence required.
What if my credit score is under 640?
You may still qualify through manual underwriting with strong compensating factors (stable income, savings, lower debts). Lender overlays apply—talk to your loan officer.
How do I know which towns around Phoenix qualify?
Boundaries change. Use the USDA Address Verification tool for any listing you’re considering, then share results with your Sold & Sunset agent.