Did you know there are USDA mortgage programs available for people home buying in rural areas in the United States? Maybe you feel more comfortable surrounded by open country more than pavement and neighbors. If that is the cases, then you may want to buy a home in the country and it may be time to apply for a USDA mortgage.
Potential home buyers interested in buying a home in rural areas may be interested in a mortgage from the US Department of Agriculture or USDA. The USDA offers very attractive home financing for people who want to buy a home in rural areas. In fact, some say that the USDA mortgage program may be one of the least-well-known mortgage loan programs in the US.
The credit standards have been eased making the USDA mortgage program more appealing to home buyers in rural America.
7 Reasons to Apply for a USDA Mortgage Loan in 2025
As part of the Rural Development program, the US government invests billions of dollars into the USDA each year to help hundreds of thousands of families every decade to buy and improve their homes.
This program has been set up to improve the US economy generally and to boost the quality of life in the rural US.
If you think you may want to buy a home in a rural area, here are some very good reasons to consider applying for a USDA mortgage:
1. USDA Mortgage Offers 100% Financing
One of the biggest benefits of the USDA mortgage is that it can often come with 100% financing, also known as a no-money down mortgage. There are few 100% USDA mortgage financing left in America today. After the mortgage melt down, federal lending standards tightened, and most 100% USDA financing programs ceased to exist.
However, the US government wants to provide incentives for people to buy homes in rural areas, so it continues to offer 100% financing for some homes purchased under the USDA mortgage program.
USDA loans are famous for their no down payment requirement. This means you can purchase a home without needing to put a significant amount of cash upfront. For many homebuyers, especially first-time buyers, this is a game-changer. The ability to keep your savings intact and not stress about a down payment can make homeownership a reality sooner than expected.
Furthermore, USDA mortgages often offer competitive interest rates, making them an attractive option for borrowers. The combination of a no down payment loan and favorable interest rates can lead to significant savings over the life of your loan.
2. Loan Is Guaranteed by the USDA
Why does it matter to you if the loan is backed by the USDA? Easy. The guarantee by USDA means that more lenders are willing to offer loans with reasonable terms. You can get a USDA backed mortgage with a very low interest rate that may be at the same rate or even lower than market rates.
The guarantee by the USDA is also the reason that you can get a 100% USDA mortgage in many cases.
3. Direct Loans Are Available
Most USDA mortgages are actually offered by approved USDA mortgage lenders. However, there are a limited number of these loans that are issued by the USDA itself. These loans are typically for people with very low incomes. So, even if you have a very low income, you still may be able to get a USDA rural loan.
Direct loans from USDA are usually for people who currently do not have decent, safe and sanitary housing. You also may qualify if you cannot get a loan from traditional sources, and have an adjusted income that is at or below the low-income limit for the area in which you live.
Guaranteed USDA loans usually are given on homes that are 1800 square feet or less with a value that is below market for the area. A typical USDA loan limit for average cost areas in the US is $216,000.
4. Very Low Credit Scores Are Ok
You do need to have an acceptable credit history, with no accounts sent to collections in the last year, and you should not have had any late housing payments in the last year. That said, you can still qualify for a USDA mortgage with a low credit score of 620. Below 580 it will be more difficult to be approved, but you still may be able to get approved with a very low credit score if you can show that you have paid rent and utilities on time. Getting approved for a no credit home loan is possible with the USDA program, so check with approved USDA lenders for eligibility.
5. You Can Get a USDA Loan for Repairs
In addition to getting a loan from USDA mortgage lenders for the home, you also may be able to get financing for home repairs. There are packages available with as much as $27,500 in repair help for your home.
6. Flexible Debt to Income Ratios
USDA generally wants to see that your entire monthly housing payment is less than 29% of your gross monthly income. It also wants to see that all of your monthly debt payments are not more than 41% of your gross monthly income. However, USDA does have some flexibility with these numbers. They may allow you to have higher debt ratios if your credit score is over 660. It is important for you to verify your DTI and credit score to maximize the ability to lock into the best priced USDA mortgage.
7, More Homes in Suburban Areas May Qualify
The major catch with USDA mortgage loans is that you have to buy a home that the USDA designates as ‘rural.’ This program after all wants to promote home ownership in rural areas.
However, the USDA map that is used to determine what ‘rural’ is has not been updated since 2000. It is expected that the agency will soon update its map with more recent Census numbers. But for now, you may be able to qualify for a ‘rural’ USDA mortgage in a suburb surrounding a major US city.
One of the most significant misconceptions about USDA loans is that they’re only available for homes located in rural, secluded areas. While USDA loans indeed aim to promote homeownership in rural regions, the definition of “rural” is relatively flexible. Many suburban and even some urban areas can qualify for USDA financing.
To determine if a specific property is eligible, you can use the USDA’s online mapping tool. The map highlights areas that are eligible for USDA loans with shaded regions. Even some neighborhoods within a city can qualify, making this mortgage program more accessible than you might think.
You should check with our approved USDA lenders to see if the homes you are considering may qualify for a USDA mortgage.
8. Streamlined USDA Loan Online Process
Applying online through platforms takes minutes, with digital document uploads and e-signatures. In 2025, this efficiency cuts application time from weeks to days, per Forbes.
9. Income Eligibility Flexibility
USDA loans are for households earning up to 115% of the area median income (e.g., $103,500 in many counties). Online pre-qualification tools from lenders verify eligibility instantly in 2025.
USDA mortgages are tailored to help individuals and families with moderate incomes achieve homeownership. While you might assume that these loans come with strict income limits, they are more lenient than you’d expect. The income limits are based on the area’s median income and family size. You’ll need to meet these limits to be eligible for a USDA mortgage.
The secret here is that the income limits are often more flexible than those of other government-backed loans. Many households with moderate incomes can qualify for USDA financing. This makes USDA mortgages a fantastic option for a wide range of homebuyers.
In conclusion, USDA mortgages offer valuable benefits that are often overlooked. These loans can be used to purchase homes in suburban or urban areas, come with no down payment requirements, and offer competitive interest rates. With generous income limits, they provide an excellent opportunity for individuals and families with moderate incomes to realize their dreams of homeownership.
If you’re considering buying a home and want to explore your mortgage options, don’t overlook the USDA mortgage program. With its unique advantages and more flexible eligibility criteria than you might think, it’s a secret worth exploring in your homebuying journey.
8. Lower Closing Costs
USDA loans often have lower closing costs (2–3% vs. 2–5% for conventional), and sellers can cover up to 6% of costs. Online lenders provide transparent Loan Estimates, helping budget effectively, per NerdWallet.
9. USDA Mortgage Refinancing Options
USDA offers streamlined refinance programs (e.g., Streamline Assist) with no appraisal or credit check in some cases. The USDA refinance loan is very accessible and affordable. Online platforms like Loan Depot or Rocket Mortgage simplify refinancing, locking rates at 6.6% in 2025.
10. Energy-Efficient Home Support
USDA loans fund energy-efficient upgrades, like solar panels, with up to $6,000 in additional financing. Online applications through lenders like Fairway Independent integrate these options, aligning with 2025’s eco-trends.
11. Online Rate Comparison
Several platforms allow comparison of USDA lenders, ensuring the best rates and terms. In 2025, checking multiple quotes online can save 0.25–0.5% on rates, per Bankrate.
12. Fast Pre-Approval for USDA Mortgages
Online pre-approval, available from lenders like CrossCountry Mortgage, takes hours, not days. This strengthens offers in competitive rural markets, where USDA-eligible homes are in demand in 2025.
14. Digital Document Management
Online portals streamline document submission (e.g., pay stubs, bank statements), reducing paperwork errors. Many USDA lenders use secure platforms, ensuring quick processing and closings (30–45 days) in 2025.
15. Access to Expert Support
Online USDA lenders offer virtual consultations with loan officers, providing guidance on USDA requirements. In 2025, platforms like New American Funding connect borrowers with specialists, enhancing approval odds.
Case Study: The Johnson Family’s Rural Tennessee Home
Location: Coffee County, TN
Challenge: The Johnsons, a family of four with a $75,000 income, struggled to afford a down payment in 2024’s rising market.
Solution: They applied online through Pennymac for a USDA loan, targeting a $250,000 single-family home in an eligible rural area. With a 650 credit score, they qualified for a 30-year fixed loan at 6.6%, with no down payment and a 1% guarantee fee rolled into the loan. The online portal simplified document uploads, and pre-approval took two days.
Outcome: The Johnsons closed in 35 days, with monthly payments of $1,600 (including taxes and fees), affordable within their budget. The home’s value rose 4% by mid-2025, adding $10,000 in equity. Online tools saved them $2,000 in closing costs compared to local banks. They plan to refinance if rates drop further.
Reference: USDA.gov. (2025). Rural Development Loan Program.
The Bottom Line on Applying for a USDA Mortgage Online
The USDA mortgage program is one of the best options out there for people with a lower income who may not qualify for other home loans. If you are interested in a rural property, you may be able to be approved for a USDA mortgage with a very low rate and 100% mortgage financing. You cannot beat that in today’s home financing market!
References: Overview of USDA Loans. (n.d.).
About RefiGuide
Bryan Dornan is a financial journalist and currently serves as Chief Editor of RefiGuide.org. Bryan has founded several mortgage and marketing companies and has worked as a loan officer and mortgage broker in the industry for over 25 years and has a wealth of experience in providing mortgage clients with the highest level of service in the industry. Bryan's continual focus is to promote affordable home-ownership to consumers like you across the United States. He also writes for RealtyTimes, Patch, Buzzfeed, Medium and other national publications. Find him on Twitter, Muckrack, and Linkedin
More articles by RefiGuide