Need a Loan with $0 Down? New USDA Income Limits

Rural Housing / USDA made some recent adjustments to the allowable household income limits.  For buyers that don’t already know, the USDA housing program will allow approved borrowers secure home financing up to 100% with no down payment needed. However, the program has a few important requirements in the way of “eligibility”   First, the house has to be USDA 0 down paymentlocated in a rural defined location.  The good news is many locations we wouldn’t think as “rural” are still approved areas. Home buyers can search for homes here. If the home is USDA eligible, the listing will usually say so. If there is a question of whether the property is eligible for USDA RD loan, check out the property eligibility here.

The second main requirement is the gross income amount of the family. There is a limit to this, which will depend on the family size and the number of dependents.  USDA Rural Development loans are geared more towards lower/moderate income households.  In MS , the 502 Guaranteed housing income cap for a standard family of 1-4 is $82,700. For families of 5+ members, the limits increase to over $109,150.  Buyers can check their locations income limits here.

Loan applicants will want to remember a few things in regards to the income restrictions:

  • The income limits are based on the borrower(s) current GROSS income. Future income after loan closing is not relevant.
  • These income caps apply to every member of the family that makes income – even if they are NOT applying for the loan.
  • Family with children or other dependents can take certain deductions.
  • Borrowers can look at the link above for their area income limit, or use the handy USDA income calculator here.  Pay attention to the listed limits for “Section 502 Guaranteed Rural Housing Loan Program”

In addition to the eligibility requirements listed above, USDA also has loan qualifying parameters that must be met:

  • Borrower will want to ensure they have a min 620 credit score
  • All the qualifying income used on the loan application must be documented,  borrowers should have a stable job history. These requirements are pretty much the same as other government backed mortgages like FHA or VA
  • The program can only be used to purchase homes that will be owner occupied. Investors are not permitted.

USDA offers many advantages especially to first time home buyers just starting out.  Zero down payment, seller paid closing costs permitted, secure fix interest rates and backed by the U.S. gov.  Applicants can learn more about all the advantages by viewing the USDA Loan Eligibility page above.  Contact us 7 days a week to learn more! Morgan and Kristy Young @ NextHome E-Realty, 228-239-0371 or 228-697-1575. You can call, text, FB message or email. Any form of communication is good with us! We will get back to you immediately!

pic of us*The info for this article was copied from

Leave a Reply

Your email address will not be published. Required fields are marked *

Bot Detection: What year was the year before last year?