Pros of a USDA Loan

• No down payment required
• Interest rates are often below comparable conventional rates
• Guarantee fees are lower than FHA mortgage insurance
• Closing costs can be covered by seller credits or gift funds
• Flexible credit guidelines for moderate-income buyers

Cons & Limitations

• The property must be located in a USDA-eligible rural or suburban area
• Household income limits apply based on county and family size
• Primary residences only
• Both an upfront and an annual guarantee fee apply
• Processing can take longer due to the USDA review step

Best For: This loan is typically best for:

• Buyers in eligible rural and outlying suburban communities
• Moderate-income households that want to buy with nothing down
• First-time buyers who don't have savings for a large down payment
• Borrowers seeking lower monthly mortgage insurance costs than FHA