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USDA loans: No down payment for eligible rural and suburban homes

Atlantic Bay Mortgage Group® offers USDA loans to eligible buyers in Virginia, North Carolina, Georgia, Florida, and beyond. Backed by the U.S. Department of Agriculture, USDA loans help moderate-income buyers purchase homes in eligible rural and suburban areas, often with no down payment at all.

Atlantic Bay has helped thousands of homebuyers navigate USDA financing. No matter if you're buying your first home, relocating to a smaller community, or simply want to avoid a large down payment, our local Mortgage Bankers are here to lend you peace of mind.

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Is a USDA loan right for you?

A USDA loan is often the right fit for buyers in these situations. Find the one that most sounds like you.

  • If your household income falls within USDA guidelines, typically at or below 115% of the area median income, a USDA loan can let you finance 100% of the purchase price. If a large down payment has been holding you back, here's a broader look at low and no-down-payment loan options.

    Check Income Eligibility

  • USDA eligibility is based on the property's location, not how remote it feels. About 97% of the country falls within an eligible area, including many suburban communities outside city centers.

    Check Property Eligibility

  • USDA loans use a guarantee fee instead of traditional mortgage insurance, and it's typically lower than what you'd pay with FHA or Conventional PMI. Curious what other buyers do to avoid PMI altogether? Here are strategies for avoiding private mortgage insurance.

    See If You Qualify

  • Both can work well for qualifying buyers, but they differ in down payment, fees, and where you can use them. We'll help you compare side by side.

    Compare USDA vs. Conventional

  • Eligibility depends on both the home's location and your household income, and both can be easy to check before you start shopping. A Mortgage Banker can walk you through it.

    Talk to a Mortgage Banker
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What is a USDA loan?

A USDA loan is a mortgage guaranteed by the U.S. Department of Agriculture through its Rural Development program. It's designed to help moderate-income buyers purchase homes in eligible rural and suburban areas, usually with no down payment required. The USDA doesn't lend money directly for most of these loans. Instead, its guarantee reduces the lender's risk, which allows lenders like Atlantic Bay to offer more accessible terms to qualifying buyers.

Eligibility depends on two things: the home's location and your household income. Properties must fall within a USDA-eligible area, and your total household income must fall at or below the limit set for your area and household size.

For more on how the program works, see our full breakdown of the USDA Rural Housing Loan.

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How does a USDA loan work?

Here's what the process typically looks like from start to finish.

STEP 1

Check your eligibility

Confirm that the property you're interested in falls within a USDA-eligible area and that your household income is at or below the limit for your area and household size.

STEP 2

Get pre-qualified

A Mortgage Banker reviews your income, credit, and debts to help you understand what you can comfortably afford. Not sure how pre-qualification differs from pre-approval? Here's the difference explained.

STEP 3

Shop for your home

Look for homes within an eligible rural or suburban area, ideally with your Mortgage Banker's guidance on eligibility as you go.

STEP 4

Submit your application

Provide income and asset documentation so your loan can move into underwriting.

STEP 5

Complete underwriting and appraisal

Your file goes through USDA and lender review, and the home is appraised to confirm it meets USDA property standards.

STEP 6

Close on your home

Sign your closing documents, pay any applicable costs, and get your keys.

USDA loan requirements

Wondering what it takes to qualify for a USDA loan? Lenders weigh a combination of several factors.

  • Property location: must be within a USDA-eligible rural or suburban area, which covers about 97% of the country
  • Household income: at or below 115% of the area median income. As of July 2026, this is generally $112,450 for a one- to four-person household and $148,450 for larger households, with higher limits in some high-cost areas. Check rd.usda.gov for your area's current figure
  • Credit score: the USDA doesn't set an official minimum, though most lenders look for a score of 640 or higher for streamlined processing. Your credit score affects more than approval odds, it shapes your rate too.
  • Down payment: none required
  • Debt-to-income ratio (DTI): generally around 29% for housing costs and 41% for total debt, though flexible with strong compensating factors.Unfamiliar with terms like DTI? Here's a quick breakdown of common mortgage acronyms.
  • Guarantee fee: as of July 2026, a 1% upfront fee, which can be financed into the loan, plus a 0.35% annual fee included in your monthly payment. It functions similarly to traditional mortgage insurance, just structured differently. Check rd.usda.gov for current rates.
  • Occupancy: the home must serve as your primary residence

No single factor makes or breaks an application. Lenders look at your full financial picture alongside your property's location and your household's income.

See If You Qualify

Pros and cons of a USDA loan

Like any loan type, the USDA loan has real advantages, along with a few limitations worth knowing upfront.

Pros

  • No down payment required
  • Lower ongoing fees than many FHA or Conventional PMI scenarios
  • Competitive interest rates for qualifying buyers
  • Flexible credit guidelines compared to some other loan types 

Cons

  • The property must be located in a USDA-eligible rural or suburban area
  • Household income must fall at or below your area's limit
  • Only available for primary residences, not second homes or investment properties
  • A guarantee fee still applies, even though there's no traditional PMI 
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USDA vs. Conventional: which is right for you?

Both can be strong options, but they serve different buyers and come with different restrictions.

FeatureUSDA loanConventional loan
Best For
Buyers in eligible rural or suburban areas with income at or below local limits
Buyers with a credit score of 620+ and stable income, in any location
Minimum Credit Score
No official USDA minimum, though most lenders look for 640
Typically 620
Minimum Down Payment
0%
3%
Mortgage Insurance
1% upfront guarantee fee plus a 0.35% annual fee
Required with less than 20% down, but can be removed after reaching 20% equity
Long-Term Cost
Lower ongoing fees than most Conventional PMI scenarios, for eligible buyers
Can become more affordable over time once mortgage insurance is removed
Key Advantage
No down payment and low fees for buyers in eligible rural or suburban areas
Available in any location, with no income or property location limits

In short: USDA loans tend to offer the lowest costs available for buyers who qualify by location and income. Conventional loans remain the more flexible option for buyers who don't fit those limits or want a home outside an eligible area. Comparing your real numbers side by side is the best way to know which one fits your situation.

Deciding between USDA and FHA instead? Both are government-backed programs with flexible qualification, but they differ in down payment, mortgage insurance, and where you can use them.

Compare USDA vs. FHATalk to a Mortgage Banker

Ready to talk through your USDA loan options? Our local Mortgage Bankers can walk you through what fits your situation. There's no pressure and no commitment.

Find a Mortgage BankerSee If You Qualify

Frequently asked questions about USDA loans

  • A USDA loan is a mortgage guaranteed by the U.S. Department of Agriculture, designed to help moderate-income buyers purchase homes in eligible rural and suburban areas, often with no down payment required.

  • You'll need to buy a home in a USDA-eligible area, keep your household income at or below the limit for your area and household size, and meet standard credit and income documentation guidelines. Most lenders look for a credit score of 640 or higher for streamlined processing.

  • No. USDA loans allow eligible borrowers to finance 100% of the purchase price, with no down payment required.

  • Eligibility is based on the property's specific location, not how rural it feels. About 97% of the country falls within an eligible area, including many suburban communities outside major city centers. A Mortgage Banker can check a specific address for you.

  • As of July 2026, most areas set the limit at $112,450 for a one- to four-person household and $148,450 for a five- to eight-person household, based on 115% of the area median income. Limits are higher in some high-cost areas and are updated periodically, so check rd.usda.gov for your area's current figure. Income includes all household members, not just the borrowers on the loan.

  • It's the USDA's version of mortgage insurance: a one-time upfront fee of 1% of the loan amount, which can be financed into your loan, plus an annual fee of 0.35% of the remaining balance, included in your monthly payment, as of July 2026. These rates are set by USDA policy and subject to change, so check rd.usda.gov for current figures.

  • USDA loans require no down payment but are limited to eligible rural and suburban properties and household income limits. Conventional loans are available anywhere, without income restrictions, but generally require a down payment and, in most cases, mortgage insuranceuntil you build 20% equity.

  • Most USDA purchases close in 30 to 45 days, though timelines can run slightly longer due to an additional USDA review step. Staying organized and responsive throughout underwriting keeps things moving smoothly.

  • No. USDA loans are intended for primary residences only and can't be used to finance second homes or investment properties.

Explore more about USDA loans

USDA eligibilityUSDA income limitsUSDA property requirements
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Take the next step toward your USDA loan

Atlantic Bay is here to help you take the next step toward your USDA loan. See if you qualify by completing our quick online form, or connect with a local Mortgage Banker who can review your scenario, answer your questions, and help you find the loan that's right for you.

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Disclosure: Information is for educational purposes only and should not be relied upon by you. Discussions regarding any financial information provided are not intended as individual recommendations and do not reflect the views or advice of Atlantic Bay Mortgage Group, L.L.C. The views expressed are subject to change at any time in response to changing circumstances in the market. Other loan program restrictions and eligibility requirements may apply. For refinances, the total finance charges may be higher over the life of the loan. Atlantic Bay Mortgage Group, L.L.C. disclaims any obligation to publicly update or revise any views expressed or information given. Loan programs may change at any time with or without notice. Information deemed reliable but not guaranteed. All loans subject to income verification, credit approval and property appraisal. Not a commitment to lend. Atlantic Bay Mortgage Group, L.L.C. NMLS #72043 (nmlsconsumeraccess.org) is an Equal Housing Lender. Located at 600 Lynnhaven Parkway Suite 100 Virginia Beach, VA 23452.

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Loan programs may change at any time with or without notice. Information deemed reliable but not guaranteed. All loans subject to income verification, credit approval and property appraisal. Not a commitment to lend. Atlantic Bay Mortgage Group, L.L.C. NMLS #72043 (nmlsconsumeraccess.org) is an Equal Housing Lender.