A zero-down-payment mortgage for eligible buyers in rural and suburban areas, guaranteed by the US Department of Agriculture.
Full Definition
USDA loans are government-backed mortgages for moderate- to low-income buyers in USDA-designated rural and suburban areas. They require no down payment and offer competitive rates. There are two main USDA programs: the Guaranteed Loan Program (through approved private lenders) and the Direct Loan Program (funded directly by USDA). Eligibility depends on property location and household income limits, which vary by county. USDA loans include an upfront guarantee fee and an annual fee, both lower than FHA mortgage insurance. Many suburban areas qualify — not just rural farmland.
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