USDA Loans

This is a shorter section because USDA is very similar to FHA so please make sure to read the FHA section of our site. There is a lot of information online about USDA but what we found online is very hard to understand. USDA is a very similar program to FHA with a few small differences. It is a cheaper program than FHA but the main difference is USDA has household income limits and can only be used in USDA approved areas. These are two very important topics. There isn't a defined minimum credit score but it appears lenders are looking for a 620-640 score to qualify. The underwriting seems to be a little more strict than FHA but the 0% down payment requirement makes it worth it if you qualify. USDA also has the same property condition requirements as FHA so please see our FHA guide. 

Click here for property eligibility

https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp

Click here to see if your income qualifies for USDA

https://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do?pageAction=state

or

https://www.rd.usda.gov/sites/default/files/rd-grhlimitmap.pdf

If you live in a rural community this is a great loan.

Per the USDA Handbook, they will not finance an income-producing property. Even though these loans are for rural communities and properties they are not for working farms. 

A guarantee will not be issued if loan funds are to be used for:

(b) Income-producing land or buildings. Purchase or improvement of land or

buildings that are typically used principally for income-producing purposes;

(c) Business or income-producing enterprise. Purchase or the construction of

buildings that are largely or in part specifically designed to accommodate a

business or income-producing enterprise;