A USDA loan is a mortgage backed by the U.S. Department of Agriculture that helps low- to moderate-income homebuyers purchase homes in eligible rural and suburban areas. It offers 100% financing — meaning no down payment — with low fixed rates and affordable mortgage insurance.

You may qualify if you meet these key requirements:

Income: Your household income must be at or below 115% of the area median income (AMI) for your county.

Credit: A 640+ credit score is preferred, but lower scores can be considered with strong compensating factors.

Occupancy: You must use the home as your primary residence.

Location: The property must be in a USDA-eligible area (many small towns and outer suburbs of major Texas metros qualify).

You can check property eligibility using the USDA Property Eligibility Map.

Many Texas communities outside large metro centers are eligible — including parts of Collin County, Ellis County, Denton County, and Montgomery County.
Even some outer suburbs of Dallas, Houston, and Austin fall within USDA’s eligibility zones.

No, USDA loans offer 100% financing, meaning you can buy a home with no money down.
You’ll still need funds for closing costs, but those can often be covered by seller concessions or rolled into the loan if the home appraises high enough.

Most lenders look for a minimum score of 640 for automated approval, though lower scores can be approved manually if you show strong income stability and low debt-to-income ratios.

Income limits vary by county and household size.
As a general rule:

1–4 person households: around $110,000–$130,000

5–8 person households: around $145,000–$170,000
You can verify current limits on the USDA Income Eligibility Site.

Yes, but it’s lower than most programs:

Upfront Guarantee Fee: 1% of the loan amount (can be financed into the loan).

Annual Fee: 0.35% of the remaining balance (included in your monthly payment).
These fees help keep the program self-funded while still offering affordable terms.

USDA loans can be used for:

Single-family homes

Townhomes

Approved condos

Modular homes
The property must be modest in size and design, safe, sanitary, and functional, and not income-producing (no farms or investment properties).

Yes, if the builder and property meet USDA guidelines.
However, most buyers use USDA loans for existing homes because construction loans require extra steps and approvals.

Typically 30–45 days, depending on appraisal and underwriting time.
Since USDA loans require final approval from the USDA office, timelines can vary slightly by county and lender.

Yes, the USDA Streamlined Assist Refinance program allows you to lower your interest rate with reduced paperwork and no new appraisal in most cases.

Yes. Gift funds can be used for closing costs, and USDA loans can also be combined with Texas down payment assistance programs to cover other expenses if needed.

0% down payment required

Low fixed interest rates

Flexible credit guidelines

Reduced mortgage insurance

Available in many Texas suburban and rural areas