Project Description

USDA Loans

  • You’re a U.S. citizen or a permanent resident with a Green Card.

  • The home would be your primary residence.

  • You meet income requirements.

  • You’re in good standing with all federal programs.

  • You can provide history or proof of on-time payments for bills such as rent or car loans.

  • The property is located in an eligible area.

  • Borrowers with assets that exceed USDA limits might be required to make a down payment.


The USDA program is like any home loan option, there are certain eligibility requirements you must meet. If you tick the following boxes, then you might be eligible for a USDA loan:

USDA Mortgage Fees

USDA mortgages come with two fees that are specific to this loan program: an upfront guarantee fee and an annual fee. Both of these fees are charged to the lender who then, usually, passes the cost on to the borrower.

The reason for both of these fees is to keep USDA loans subsidy-neutral, which means that any losses incurred by the program are paid for by these fees instead of taxpayer dollars. Depending on the needs of the program, the fees can change annually.

The upfront guarantee fee for fiscal year 2020, which runs from October 1, 2019 through September 30, 2020, is 1 percent of the loan amount. This fee can often be rolled into the mortgage, instead of paying it out of pocket. The annual fee for the fiscal year 2020 is .35 percent of the loan amount. Thus, a $100,000 mortgage would have a $1,000 one-time payment and a $350 per year ongoing payment for the life of the loan.

Other USDA mortgage costs might include:

  • Origination fees

  • Loan application fee

  • Title insurance

  • Processing or underwriting fees

  • Credit report and notary fees

  • Appraisal

  • Discount points (must choose to purchase)


What are the income requirements for a USDA loan?

The USDA loan program is geared toward low- and moderate-income home buyers. For this reason, applicants can’t earn more than the income limits. These limits vary by metro areas and family size. In more expensive areas, the income ceiling is higher. The income limits also change with family size, so for families that have more members the income limit rises proportionately.