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USDA Loan Calculator – Your Resource


Consider a USDA (United States Department of Agriculture) loan, a Rural Development loan, for rural or suburban living.  Only certain addresses qualify, so the USDA eligibility map reveals if a USDA loan can finance your desired property purchase, including new construction. USDA loans require that your income fits within USDA income limits. Begin by checking your eligibility and the property’s eligibility with the USDA loan calculator.  Contact your Real Mortgage Consultant at Winner’s Mortgage for your USDA loan.  And, if you prefer, your Real Mortgage Consultant will check your eligibility for you.

Interest rates tend to be on the lower range of market rates.  Zero down payment financing is available.

The USDA Loan

The United States Department of Agriculture guarantees USDA Rural Development loans, including the USDA construction loan, funded by private lenders. For some borrowers, the USDA Direct Home Loan Program actually funds and subsidizes loans to low and very low income households. Discover more with the USDA loan calculator – or contact Winner’s Mortgage first to walk you through the options.

The USDA loan, like VA and FHA loans, provides lower risk to lenders due to government backing. Lenders are assured that the government will reimburse a portion of the loan amount if the borrower defaults. This gives private lenders confidence to offer lower down payments and interest rates.

USDA home loans fill a niche for suburban and rural homebuyers, and for borrowers not qualified for a conventional mortgage. The name Rural Development indicates that the U.S. Department of Agriculture aims to assist people to have their own homes in rural and suburban areas.

USDA income limits restrict the maximum borrowers’ income to meet the program’s goal of serving lower to middle income customers.

Types of USDA Loans

USDA Rural Development loans are available in three types of financing. Some direct lenders also offer a USDA construction loan.

USDA-guaranteed loans

Private lenders fund USDA-guaranteed mortgage loans with backing from the USDA. USDA loans are one of the very few loans still available with a zero down payment option. They tend to also offer lower market interest rates.

The USDA guarantee partially covers the private lender if the borrowers default on the payments. So mortgage insurance, called a guarantee fee, is required. Up to 97% of land is eligible for Rural Development loans, including areas near cities.  Therefore, to determine the location’s eligibility, check the USDA eligibility map or contact Winner’s Mortgage for assistance.  Learn more in the eligibility section of the USDA site.

The USDA income limits are set at a maximum of 15% over the area’s median income. USDA guaranteed loans do not have a maximum loan amount.

Direct Loans

As an alternative to guaranteed loans, direct loans are funded by the USDA.

USDA direct loans are for borrowers who do not have currently have adequate housing, cannot obtain alternate financing and with a low income.  Direct loans come with many restrictions due to the nature of the loan and the market these loans serve.

Maximum USDA income limits target direct loans to borrowers with low to very low income. The borrowers’ must have very low or low incomes as defined by USDA for the location plus demonstrate an ability and willingness to repay debt.

Very-low income is defined as below 50 percent of the area median income (AMI).  Low income is between 50 and 80 percent of the AMI.

Home Repair Grants and Loans

This is a grant and loan program for very-low-income homeowners to repair, improve or modernize their homes.  It also serves very-low-income homeowners to remove health and safety hazards.

Home repair grants and loans can be a mixture of loans and grants for home upgrades and repairs. As a type of USDA construction loan, it can grant up to $10,000, and loan up to $40,000.  These can be combined for up to $50,000.

The USDA income limits for borrowers with this loan must be under 50 percent of the area’s median income. And repayment for the loan can be accomplished for 20 years. Use Winner’s Mortgage calculator in the right column determine the USDA principal and interest.

USDA Construction Loan

The USDA construction loan allows for a single loan that covers the construction of the home, then amortizes to pay it off over time. It contains the same features as other Rural Development loans such as no required down payment, a low mortgage insurance “guarantee fee”, generally lower than market interest rates than for other construction loans.  As with the other USDA loans, borrowers do need to qualify for the USDA income limits.

Benefits of USDA Rural Development loans

USDA loans offer advantages such as:

  • 100-percent home purchase price financing
  • Backed by the U.S. Department of Agriculture
  • Lower mortgage insurance (called a guarantee fee)
  • Potential for below-market loan interest rates
  • Zero to low down payments
  • 15 & 30-year fixed terms

Contact your Real Mortgage Consultant with Winner’s Mortgage or use a USDA loan calculator for more information.

Processing Your USDA Loan

Refer to Winner’s Mortgage exclusive Winner’s Mortgage Purchase Program for more information on how the purchase loan process works.

Just as any loan program requires qualification, USDA Rural Development requires additional qualifications for the borrowers’ income level and the location of the purchased property.  The qualified location of the property can be verified using the USDA property eligibility at the USDA eligibility map.

Ask the Help of Your Real Mortgage Consultant

Your Real Mortgage Consultant at Winners’ Mortgage guides you through the process of dealing with your mortgage when performance counts.  Get Started by completing Winner’s Mortgage “Get Started” Client Questionnaire loan application here.

While you don’t have to understand USDA Rural Development loans for Winners’ Mortgage to successfully provide your financing, it is best for you that you understand what you are doing.  Your Real Mortgage Consultant along with Winner’s Mortgage exclusive Winner’s Mortgage Master Plan will coach you through the process.

And the more you know and understand, the better the decisions you can make for yourself.  You will never get that level of service and value from just any typical run-of-the-mill loan officer.

Eligibility Check

As you check your numbers with a USDA loan calculator also enter your information at the “Get Started” page.  This provides your Real Mortgage Consultant with the information needed to get it started for you.  Discover more about the process on the Winner’s Mortgage Program page.

Here is a general list of qualification topics:

  • Borrower
  • Loan Credit
  • Loan Income
  • Property
  • Location

The property must be your primary residence and located in an approved area according to the USDA eligibility map.

USDA property eligibility requirements include existing or new construction homes, townhouses and condos, existing or new modular homes.  Ineligible properties include farms, hobby farms, existing manufactured housing, duplexes and multi-unit properties, property on a dirt road, property that requires transporting water, properties with the site value more than 30% of the total appraised value.  Properties with swimming pools or requiring repairs can be conditionally allowed.


As previously mentioned, income limits apply for USDA loans.

Also, borrowers must be an American citizen or a legal permanent resident to be eligible. And they need to qualify with their credit and income.

Loan Credit

The U.S. Department of Agriculture does not require a minimum credit score. Borrowers with bad credit scores can still be qualified for a USDA loan.

Borrowers with a 640 credit score and higher are eligible. Lower scores can still be eligible but will need compensating factors to help offset the lower credit score. Compensating factors can include:

  • Credit References
  • Rental Payment Histories
  • Utility Payment Histories

For people with a bad credit history, letters of explanation explaining valid reasons for this bad history can be helpful. For example, a valid reason is a circumstance for which you had no control, such as a medical emergency.

Loan Income

Another way to prove your capability to pay the USDA loan is with good evidence of your income. The income eligibility of a borrower can be checked using the USDA eligibility map. Income eligibility is dependent on your area.

Income qualification is based on your household income compared to your area’s median income. A USDA loan calculator can help.

When checking for income eligibility, consider the following:

Stable Income

A stable and dependable income can be proven through the following:

  • For self-employed & commission income: 24 months of income tax returns
  • For regular wage and salary employees: Recent pay statements and last 2 years of W-2 statements
Debt-to-Income Ratio

The maximum borrower’s debt-to-income ratio for USDA Rural Development is 41%. Use this USDA loan calculator to discover your DTI ratio.

USDA Income Limits

As mentioned, maximum USDA income limits apply on Rural Development loans. USDA loan income limits depend on the property location and the number of household members. Discover the applicable USDA income limits here.

In qualifying for the USDA income limits, understand these terms for computing your income.

  • Annual Household Income – The income of all adult household members, not just parties to the note.
  • Adjusted Annual Income – The household’s annual income minus certain qualified household deductions.
  • Repayment Income – The stable and dependable income used to calculate debt ratios and determine whether the applicant(s) can afford the home.

The status of the property plays a role in applying for the USDA loan. For USDA property eligibility, these are qualified:

  • Townhouses
  • Condominiums
  • Modular/Manufactured Homes
  • Short Sales Homes
  • Foreclosed Homes
  • New Construction Homes

Properties that generate income are not eligible for the USDA loan. If they are no longer producing income, they may qualify. This is based on the USDA property eligibility.

Another factor to consider in USDA property eligibility is the property’s condition. The property needs running utilities (e.g. water and electricity). It also needs to be clean and safe based on USDA guidelines.

Finally, it is relevant that the property serves as the primary residence of the borrower. Direct access to the driveway, street, or road is also part of the USDA property eligibility.


The location of the property is critical for all Rural Development loans including the USDA construction loan. The property must be in a rural area as defined by the USDA eligibility map.

A rural area for USDA property eligibility is defined as having less than 20,000 residents and, in some cases, up to 35,000 residents.  This includes many suburban areas.  In fact, 97% of the land of the United States qualifies.

While the USDA eligibility map will help, you should also know more about the USDA income limits. There is linked eligibility between your income and the location of the property. The USDA considers your income in relation to the median income of the area.

For your qualification, you can use a USDA loan calculator. Read the section about USDA income limits to learn more about this. That is to say, a USDA eligibility map will also be helpful in the entire process.

Choosing USDA-approved financing

Your Real Mortgage Consultant at Winner’s Mortgage guides you to qualified USDA-approved funding for the USDA standard loan and construction loan.

Choosing your financing with Winners’ Mortgage experience provides security to you, with additional validity added by USDA approval.


Your very first, most important step is to “Get Started” with Winner’s Mortgage loan application questionnaire here. Don’t gamble. Bet on a winner.


Your most safe and certain way to get started is with a real pre-approval.  This requires proof of the numbers you entered with supporting documents.  You will also upload these documents at the “Get Started” page, and these documents include the following:

  • Recent Pay statements for the last 30 days – for employed borrowers
  • W-2s for the last 2 years – for employed borrowers
  • Tax Returns for the past 2 years – for retired, self-employed or commission-paid borrowers
  • Bank statements for the last 2 months
  • Your most recent retirement account statement
  • Earnest Money Check for a home purchase
  • The name and contact information for your homeowner’s insurance agent

This is the list of basic documentation needed.  Additional documents may be required depending on the situation.  Requirements will depend on the USDA loan type, including a USDA construction loan. Your lender will also play a major role in the documents needed.

You will know for sure what documentation you need to provide when you apply with Winner’s Mortgage.

Terms & Their Definitions

Refer to a USDA loan calculator for more information. Start here with some common terms.

Mortgage Insurance

The USDA loan requires mortgage insurance, for USDA known as a guarantee fee.  Mortgage insurance protects lenders from payment defaults. Here are the USDA loan mortgage insurance (guarantee fee) rates:

  • Upfront Loan Guarantee Fee: 1% of the loan amount (for the purchase and refinance)
  • Monthly Guarantee Fee: 0.35% of the loan amount per year (prorated on a monthly basis with your loan payment)

USDA guarantee fees are lower than mortgage insurance rates for conventional loans, including the USDA construction loan. The upfront fee can be added to the loan balance.

Use a USDA loan calculator to help avoid confusion.

Income Limits

USDA income limits are maximum income amounts set to qualify for a USDA Rural Development loan. The USDA loan is used for low to moderate-income households. These limits depend on the household size and property location.

When considering the household size, USDA income limits may vary every year and by geography. Here is a link for the list of income limits all over the country.

The maximum annual household USDA income limits is set at 115% of local median income, the projected total salary of the household’s adults.

The adjusted annual income is accounted for by the USDA income limits. The adjusted annual income calculates valid deductions subtracted from annual income. A USDA loan calculator will be helpful in these computations.

Again, qualification for a USDA Rural Development loan must fit both property and income eligibility.  Income is checked at the USDA income limits. A USDA eligibility map shows if the property qualifies.

USDA Repayment Income

USDA repayment income refers to the ability of the borrowers to repay the USDA loan. Lenders look at the borrower’s repayment income through the DTI ratio.

The debt-to-income ratio provides the creditworthiness of the borrower. The maximum standard DTI is 41%.

Therefore, the borrower should not spend more than 41% of income on debt repayment. People with a higher DTI may be qualified with compensating factors.  Compensating factors can include factors such as the new housing payment reduced from the previous payment, accumulated savings of three or more months, continuous employment with the same employer for more than two years.

Loan Rates

The USDA loan rates tend to be lower than rates on conventional loans.  USDA direct loan interest rates are significantly less than market rates to make the loan more affordable for very low income borrowers.

USDA-approved lenders determine loan interest rates. A USDA loan calculator can give you an estimate. Additionally, lenders consider the borrower’s credit score and income when issuing loan rates.

USDA Rural Development loans offer 15 to 30-year terms with fixed rates. This is one of the very few loans that are currently available with a zero down payment.  Obviously, choosing to make a down payment will reduce the monthly payment.


Here are some frequently asked questions (FAQs) about USDA Rural Development loans.

Can I refinance my USDA loan?

Yes, USDA offers a streamline refinance program offering reduced credit and income verification.

How will I know if my area is eligible for USDA?

Check here, USDA property eligibility. The USDA eligibility map shows the 97% of United States land area that qualifies.

Can I use the USDA loan for home renovations and repairs?

USDA loans can be used for renovations and repairs. Some of the eligible changes include:

  • Windows/Appliance Replacement
  • Driveways/Walks Preparation
  • Broadband Service Installation
  • Gas, Electricity, Water, & Sewer Connection
  • Energy-efficiency Improvements (Solar Panels & Roofing)
  • Changes to Assist Household Members with Physical Disabilities

Can I cash-out my USDA refinance loan?

No, the USDA loan can only be used for purchases and streamline refinances.

Can I apply for the USDA loan even if I am self-employed?

Yes, self-employed borrowers can qualify for the USDA mortgage. Proof of self-employment income is required with 2 years of federal tax returns.

Am I qualified for a USDA loan if I am a repeat buyer?

USDA Rural Development is not a first-time homebuyer program.  Therefore, the USDA loan is for both first-time and repeat buyers.

Do I need to escrow insurance and taxes when financing with a USDA mortgage?

Yes, escrows for taxes and insurance are required with USDA.

Is the USDA loan a good mortgage to consider?

Interest rates on a USDA Rural Development loan are more affordable in terms. However, maximum income limits for borrowers and restrictions on property locations apply. Check the USDA property eligibility and USDA income limits for more details.

Homebuyers with low to moderate-income are the target market for a USDA loan. A down payment is not required. Mortgage rates are typically lower than other loan programs. This makes the mortgage more affordable and easier to access.

The property must be located in rural or suburban areas.  Review of the USDA eligibility map shows that covers about 97% of the United States.

The USDA Rural Development loan is worth investigating for purchasing an existing home or new construction, .  Contact your Real Mortgage Consultant at Winner’s Mortgage for more information.

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