USDA Mortgages Allow 100% Financing & 92% Of The U.S. Is Eligible

The USDA loan is the flagship mortgage program of the U.S. Department of Agriculture.

Don’t be fooled its name - USDA mortgages aren’t for farms! They’re for homes in less-densely populated areas, includes suburban and rural neighborhoods.

The program started in 1949 when the American Housing Act passed.

The law have gave the U.S. Department of Agriculture authority to create and fund no-money-down home loans for home buyers in low-density areas, including suburban neighborhoods and rural zones.

The program is known by other names, too.

  • The USDA Mortgage
  • The USDA Guaranteed Loan
  • The Rural Development Guaranteed Housing Loan Program
  • The RD Loan
  • The Rural Loan

It's even sometimes called the Section 502 Loan, a reference to the section of the Housing Act of 1949 that authorized the program in the first place.

The benefits of a USDA mortgage include:

  1. Down payments are optional
  2. Interest rates are discounted below the market average
  3. Closing costs can be financed, so no cash is needed at closing

USDA loans allows 100 percent financing, and 92 percent of the United States is on USDA-eligible land. To qualify, home buyers must show they're buying a modest home in a modest area; and, an income level that's within area limits.

Ask us your USDA mortgage question in the chat box. We're here to help.

Dan Green

Dan Green

Dan Green is a former mortgage loan officer and an industry expert. He's appeared on NPR and CNBC, and in The Wall Street Journal, Bloomberg, and dozens of local newspapers. Dan has helped millions of first-time home buyers get educated on mortgages, real estate, and personal finance. Have mortgage questions? Ask Dan in the chat.

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