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USDA Loan Requirements (2020) For 0% Down!

What are the Usda loan requirements in 2020? We’re going to unpack the USDA loan so you can see if it’s the right loan option for you!

Listen To The Podcast

7 Proven Ways To Save Thousands On Your Home

In this video you’ll learn:
– the minimum income for a USDA loan
– how you know if a home qualifies for a USDA loan
– if USDA loans are a good idea for you
– USDA loan income limits
– USDA loan down payment
– and a whole list of other requirements

USDA loans are incredible options for first time buyers and seasoned buyers who are looking to put 0% down on a home.

The biggest “catch” with USDA loans is that the home has to (1) qualify as a rural property and (2) you have to have a household income below the USDA income limit.

USDA loans require that the property you purchase be in good condition and that you’re living in the home as your primary residence. Not only that, but the buildings and land cannot produce income. USDA is very strict on making sure there is zero commercial use with a USDA loan. If you need to finance a home with an active farm on the property, you’ll need to use a farm loan.

USDA seems to have a somewhat narrow box of qualifications for buyers meaning that it can be a bit difficult for people to qualify for. USDA is looking for credit scores in the 640+ range. High credit scores tend to be the easiest way to get a USDA loan, but some lenders will allow down to a 580 credit score.

You’ll need to show an underwriter consistent income and employment over the past 2 years. Any job gaps that extend over 30 day will need a letter of explanation so the underwriter can understand if income and employment will be consistent in the future.

Can you get a USDA loan if you have a bankruptcy, foreclosure, or short sale? Yes! But USDA loans require that you wait a minimum of 3 years after the discharge or finalization of any derogatory credit event like a bankruptcy, foreclosure, or short sale.

Compared the FHA loan, USDA loans tend to be better since they allow 0% down, low mortgage insurance, and a reduced funding fee compared to FHA loan.

All in all, USDA loans are a great option if the program is something you can fit into. The qualifications can sometimes be tight as USDA have made the program somewhat niche, but if you qualify, USDA loans are incredible since they allow no money down, you can finance closing costs into the appraised value, mortgage insurance is low, the funding fee is low, and interest rates are remarkably low since USDA loans are government backed loans. This means the loan is less risky to lenders who are more willing to offer better rates for the program.

Keep in mind, USDA does have property limits and income limits. The best way to explore the USDA property eligibility and income eligibility is through the link below that will help you discover if you can qualify for a USDA loan.

USDA map and income calculator:


1) FHA Loan Requirements (2019 & 2020)

2) Should You Use Your Tax Return As A Down Payment?

3) What’s The Typical Down Payment On A House?

4) What To Expect During The Mortgage Process

5) How To Find A Realtor (For First Time Home Buyers)

Do you want to:
Get pre-qualified?
Schedule a call?
Text me a question?
Email me?
Get a Realtor/LO referral?
Go to

— Legal —

Kyle Seagraves
NMLS# 1701021
Motto Mortgage Alliance
8900 N. Dixie Dr.
Dayton, OH 45414
Equal Housing Opportunity

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This post first appeared on C O Z I, please read the originial post: here

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USDA Loan Requirements (2020) For 0% Down!


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