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How to Qualify for a USDA Loan?

The iServe Blog

The USDA offers several different types of home loans designed to increase home ownership in rural areas. Some models are more restrictive than others. The direct loan program is specifically designed for people with a low income, but a USDA guaranteed loan covers a wide variety of properties, locations and incomes, making it accessible to far more future homeowners.

What Is a USDA Loan?

The U.S. Department of Agriculture offers several loan options, including direct loans from the agency itself, guaranteed loans made through a residential mortgage lender, and loans for refurbishing and fixing up existing properties.

For direct loans, the home needs to be under 1,800 sq. ft. in size, and the overall cost needs to be below the USDA loan limit. These subsidized loans can have interest rates as low as 1 percent and are designed for those with low or very low income.

Guaranteed loans are offered through private lenders and are generally far more accessible and have a variety of eligibility requirements. This is a surprisingly broad program with options for homeowners at many different income levels and in many different communities and areas. Eligibility requirements include:

  • The borrower needs to be a U.S. citizen and needs to use the home as a primary residence.
  • The monthly payment needs to be less than 29 percent of the buyer’s monthly income; your other monthly debts need to be below 41 percent of your income.
  • A stable job history with steady income for the past 24 months.
  • Decent credit history, particularly in the 12 months prior to the mortgage loan application.
  • You need to meet income eligibility requirements, which are based on the average income for the state you live in.
  • The home you are getting a mortgage for needs to be in a USDA-covered area; almost all areas that are not in cities or metropolitan areas qualify.
  • The loan needs to fall into the guideline amounts, which vary by state.

How Can I Apply for a USDA Loan?

The best way to determine eligibility and start the mortgage loan process is to speak with a lender that specializes in USDA loans. This is a specialty product, and your lender needs to be familiar with it to serve your needs. The iServe Residential Lending, LLC team includes mortgage loan officers familiar with handling USDA loans who can walk you through the process and help you determine your eligibility. Contact us to learn more about the USDA mortgage loan and how this beneficial program can help you become a homeowner.


iServe Residential Lending, LLC is not affiliated with or acting on behalf of or at the direction of the USDA or the Federal Government.

Programs, terms and guidelines subject to change without notice. Not all applicants may qualify. All loans subject to underwriter and investor approval. Arizona Mortgage Banking License BK-0920658; Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, License  413-0646; Regulated by the Division of Real Estate Colorado Supervised Lender #988552; Georgia Residential Mortgage Licensee License #19613; Licensed by the New Jersey Department of Banking and Insurance License # 512567; Licensed Mortgage Banker—Licensed Mortgage Banker-New York State Department of Financial Services License # B501014; Licensed by the Virginia State Corporation Commission; Virginia Lender License #MC-3220, NMLS #2914 ( iServe Residential Lending, LLC, NMLS #2914-15015 Avenue of Science Suite 250, San Diego, CA 92128 Phone: (858) 486-4169