Am I Eligible for a USDA Loan?
Published by Contour Mortgage on February 01 2017

Am I Eligible for a USDA Loan?

Topics: Home Buyers, USDA

USDA loans allow borrowers of modest means to enjoy the security and stability of owning their own home. If you aren't able to qualify for another type of mortgage, you may be eligible for a USDA loan.

What is a USDA Loan?

USDA stands for the United States Department of Agriculture, and the USDA runs the program because it is designed for rural areas. However, the definition of rural area is broad enough to cover almost all of the country, including the suburbs of most major metropolitan areas.

A USDA loan is a government-backed mortgage that has reduced income and credit requirements. The program is specifically designed to allow low-income borrowers to qualify for a mortgage with low interest rates.


What do I need to be eligible for a USDA loan?

You may be eligible for a USDA home loan if you meet the following requirements.

  • You are an American citizen or permanent resident.
  • Your income is no more than 115 percent of your area's median household income. For Nassau and Suffolk Counties, this is between $38,150 and $152,000 depending on your family size.
  • You have at least two years of steady income backed by W2s or tax returns.

Expect a review and assessment of your credit history as well.

  • While there are not set credit requirements, you should try to increase your credit score by as much as you can before applying. The higher it is, the more likely you will qualify.

The home you purchase must meet additional USDA eligibility requirements.

  • It must be your primary residence.
  • It can't have luxury features, such as in-ground swimming pools.
  • The square footage is limited based on the area and your family size, with a typical cap of 2,000 square feet.

Learn more about USDA loans and how to apply.

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