United States Department of Agriculture Loan

What is a U.S. Department of Agriculture loan?

Also known as USDA Loan, this zero-down, 100% financing home loan is sponsored by the United States Department of Agriculture to promote homeownership in less-dense communities across the U.S.

The U.S. Department of Agriculture Loan often known as the USDA Rural Development Loan (RD Loan) or Rural Housing Loan. The program is part of the larger Rural Housing Service under USDA’s umbrella of programs.

How do USDA loans work?

Getting a USDA loan program is not much different than getting an FHA loan or a conventional mortgage. Like FHA, a government agency sponsors the program, but local lenders handle 100% of the transaction. That means your lender does everything from taking your application to issuing the final approval. USDA puts a final stamp of approval on the loan, and even that is handled by the lender.

Features & Highlights
  • May help low-to-moderate income borrowers qualify
  • No down payment for eligible applicants in designated rural areas
  • Allows seller contribution to closing costs