In short
A USDA loan is a 30-year fixed-rate mortgage backed by the U.S. Department of Agriculture that requires no down payment. It's for primary residences in eligible rural and suburban areas, for households whose income falls within the area limit. USDA sets no minimum credit score.
Reviewed by Scottie Campbell, NMLS #1610726 · Last updated October 18, 2026
How does a USDA loan work, and do I qualify?
A USDA loan is a 30-year fixed-rate mortgage backed by the U.S. Department of Agriculture for homes in eligible rural and suburban areas. It requires no down payment. To qualify, the property has to be in an eligible area, your total household income has to fall within the area limit, and the home must be your primary residence. USDA sets no minimum credit score: files at 640 and above usually run through USDA's automated system, and files below 640 are manually underwritten. Send me the address and I'll check eligibility before you get attached to a house.
Key takeaways
A lot of buyers assume they need years of savings before they can own a home. If the house you want sits in a USDA-eligible area and your household income fits the limit, you may not need a down payment at all. I'm Scottie Campbell, owner of Waymaker Mortgage Company, and I help families figure out quickly and honestly whether USDA is the right path for them.
What a USDA Loan Really Is
A USDA loan is a home loan backed by the U.S. Department of Agriculture through its Rural Development program. The goal of the program is simple: help moderate-income households buy a home in eligible rural and suburban areas, with no down payment required.
Quite frankly, "rural" is the word that throws people off. Many folks hear it and picture a farm at the end of a dirt road. In reality, USDA eligibility is mapped by address, and plenty of neighborhoods, small towns and newer subdivisions qualify. If you're shopping around Georgetown, TX, it's worth checking before you assume a USDA loan isn't for you.
The Two Questions That Decide Eligibility
Every USDA file comes down to two checks. I run both early so you know where you stand before you fall in love with a house.
- Is the property in an eligible area? USDA publishes eligibility by address. Boundaries shift over time, and two homes a few miles apart can land on different sides of the line. Send me the address and I'll look it up.
- Is your household income within the limit? USDA caps total household income at a percentage of the area median, adjusted for household size. That means everyone in the household who earns income counts toward the limit, not just the people on the loan.
Beyond those two, the home has to be your primary residence, and you'll need steady income and a payment that fits your budget.
Credit: It's Never a No, It's Always a How
USDA itself does not set a minimum credit score. Here's how it works in practice:
- 640 and above: your file typically runs through GUS, USDA's automated underwriting system.
- Below 640: the file is manually underwritten, which means an underwriter reviews your full credit history, income and payment patterns by hand.
What that means for you is that a score under 640 doesn't close the door. A manual file takes more documentation and a little more care, and that's exactly the kind of work I like to do. And if today isn't the day, remember: can't do it now doesn't mean can't do it ever. I'll build you a Mortgage Action Plan with the specific steps to get there.
How USDA Costs Are Structured
USDA loans don't carry private mortgage insurance the way some conventional loans do. Instead, the program charges a guarantee fee:
- An upfront guarantee fee, which can usually be financed into the loan amount instead of paid in cash at closing.
- An annual fee, divided into monthly installments and included in your payment.
USDA loans are 30-year fixed-rate mortgages, so your principal and interest payment stays the same for the life of the loan. As for the rate itself: your rate depends on your scenario and the day's market. Reach out and I'll price it for real.
This is where my Total Cost Analysis earns its keep. I don't just look at one number. I look at what the loan costs you over the time you actually plan to own the home, so you can compare USDA against FHA, conventional or VA with your eyes open.
USDA Compared With Other Low-Down Options
| Feature | USDA | FHA | Conventional |
|---|---|---|---|
| Minimum down payment | 0% | 3.5% at 580+ | As little as 3% on some programs |
| Location rules | Eligible areas only | None | None |
| Income limits | Yes, by area | No | Only on certain programs |
| Ongoing insurance or fee | Annual guarantee fee | Annual MIP | PMI when under 20% down |
| Occupancy | Primary residence | Primary residence | Primary, second home or investment |
No single loan wins every scenario. My job is to educate and empower you. Your job is to decide.
Closing Costs and Down Payment Assistance
Zero down doesn't mean zero cash. You'll still have closing costs, prepaid items and possibly an earnest money deposit. The good news is there are ways to cover them, including seller-paid concessions, gift funds from family and, in some cases, down payment assistance that can be applied toward closing costs.
Waymaker Mortgage Company has access to dozens of national, state and local assistance programs most banks don't offer. Programs that can pair with a USDA loan include:
- Orion Boost Down Payment Assistance and SmartBuy DPA (national)
- TSAHC Home Sweet Texas, TDHCA My First Texas Home, SETH 5 Star Texas Advantage and Travis County HFC Hill Country Home DPA (Texas)
- Florida Assist and Florida Hometown Heroes (subject to annual funding) (Florida)
- OHFA Down Payment Assistance (Ohio)
Availability depends on property location, income limits and loan type, and eligibility is confirmed program by program. I'll tell you which ones you actually qualify for, not just which ones exist.
Why Work With Me on a USDA Loan
You're talking to the owner of this company. Here's what that gets you:
- Funded in house. Waymaker Mortgage Company closes and funds USDA loans in its own name, with underwriting through multiple investor partners. A bank has one underwriting desk and one set of rules. If one investor's guidelines don't fit your file, I take it to one that does.
- Greenlight Approval. I pre-underwrite as many files as possible up front. Greenlight Approval is the highest assurance of approval available before you shop, and it can make your offer as strong as cash, sometimes stronger.
- 23+ years of experience. I've been doing this since 2003, and I'm a real estate investor myself. I know what sellers and agents look for.
- High-tech, high-touch. You get a modern digital process plus a real person who answers. Feel free to text me.
I'm licensed in Texas, Florida, Pennsylvania and Ohio, and my office is right here in Georgetown, TX. Send me an address and a rough picture of your household income, and I'll tell you quickly whether USDA is on the table. Let's get you rocking and rolling.
Information on this page is general and educational. It is not a commitment to lend or an offer of credit. Programs, guidelines and eligibility change and depend on your full scenario. Waymaker Mortgage Company, NMLS 2440476. Equal Housing Lender.
Quick facts
- Loan type
- Government-backed (USDA Rural Development)
- Minimum credit score
- No USDA-set minimum; 640+ via GUS automated approval, below 640 manually underwritten
- Minimum down payment
- 0%
- Loan term
- 30-year fixed rate
- Eligibility
- Eligible area plus household income within the area limit
- Occupancy
- Primary residence only
Is this loan right for you?
Who it's for
- Buyers purchasing a primary residence in a USDA-eligible area
- Households whose total income falls within the area limit
- First-time and move-up buyers who want a 0% down option but don't have VA eligibility
- Borrowers with scores below 640 who are open to a manually underwritten file
Who it may not fit
- Buyers looking at homes outside USDA-eligible areas
- Households whose income is above the program limit
- Investors or second-home buyers (USDA is primary residence only)
Pros and cons
Pros
- No down payment required for eligible buyers
- No USDA-set minimum credit score
- 30-year fixed rate, so principal and interest stay the same
- Upfront guarantee fee can usually be financed into the loan
- Can pair with down payment assistance for closing costs where programs allow
Trade-offs to weigh
- Property must be in a USDA-eligible area
- Household income limits apply, and all earners in the home count
- Guarantee fees apply, including an annual fee for the life of the loan
Frequently asked questions
What credit score do I need for a USDA loan?
USDA doesn't set a minimum credit score. If your score is 640 or higher, your file typically runs through GUS, USDA's automated underwriting system. Below 640, the file is manually underwritten, which means more documentation and a careful look at your full history. It's never a no. It's always a how, and I'll show you the path.
How do I know if a home is in a USDA-eligible area?
USDA maps eligibility by address, and the boundaries can surprise you. Homes in small towns, newer subdivisions and neighborhoods outside dense city centers often qualify. Text me the address and I'll check it before you write an offer.
Is there an income limit for USDA loans?
Yes. Total household income has to fall within a limit set as a percentage of the area median, adjusted for household size. Everyone in the household who earns income counts, even if they won't be on the loan. I'll run the numbers with you up front.
Is a USDA loan really zero down?
Yes, USDA requires no down payment for eligible buyers. You'll still plan for closing costs and prepaid items, but those can often be covered with seller concessions, gift funds or, in some cases, down payment assistance.
Do I have to be a first-time buyer to use USDA?
No. First-time and repeat buyers can both use USDA, as long as the home will be your primary residence and you meet the location and income requirements.
Can you help me make a strong offer with a USDA loan?
Absolutely. With Greenlight Approval, I pre-underwrite your file up front so sellers see a buyer who is already vetted. Because Waymaker Mortgage Company funds USDA loans in house, I can keep your file moving and take it to a different investor if one set of guidelines doesn't fit.
Can I use a USDA loan for an investment property or second home?
No. USDA is for primary residences only. If you're buying a rental or a second home, I'll walk you through conventional or DSCR options instead.
Related loan programs
Low down payment options, dozens of down payment assistance programs and a Greenlight Approval that helps your offer compete. It's never a no. It's always a how.
Flexible credit, low down payment, and dozens of assistance programs. I'll show you how FHA fits your plan, then you decide.
No monthly mortgage insurance, no minimum credit score on my end, and VA loans funded in house by Waymaker Mortgage Company with underwriting through multiple investors.
Last updated October 18, 2026 · Reviewed by Scottie Campbell, NMLS #1610726. This page is educational and not a commitment to lend; program details change — ask for current figures.