USDA Loans: What to Know About Income Limits and Eligibility

The United States Department of Agriculture (USDA) is one of the largest agencies in the federal government. With 29 different offices, nearly 100,000 employees, and a total budget of roughly $140 billion, the USDA provides leadership in many areas, including food, agriculture, natural resources, and nutrition.

One of their responsibilities is also rural development. This means helping people in small-town and rural America make improvements to property and infrastructure, as well as backing home loans in these areas.

But like every agency that backs mortgage lending, the USDA has a very detailed process for eligibility, including specific income limits.

Update: As of 2019, loans supported by the USDA (“USDA loans”) require a 600 credit score. Information on this article may be outdated. Please call our staff for further details.

USDA Loan: Income Limits, Property Eligibility, and Other Important Information

Purpose of the USDA Rural Development Program

It helps to start with a basic understanding of the purpose and goals behind the USDA Rural Development program. After all, the USDA is a government organization focused on agriculture, livestock, and farming; why are they even involved in mortgages?

The purpose of the USDA’s Rural Development office is to improve the quality of life and income opportunities in rural America. The office performs many duties, including the administration of loans and grants that, hopefully, improves living conditions and provides better economic development.

The Single Family Housing Guaranteed Loan program is a subsection of the Rural Development wing of the USDA. This program is designed to help qualifying lenders provide loans to specific people in approved rural areas. The goal is to help rural residents find safe housing that helps improve their lives and, hopefully, the surrounding community.

The program offers a 90% loan note guarantee, helping approved lenders significantly reduce the risk of lending out large property loans. With this program, lenders can offer loans that cover 100% of the purchase price, as well as loans for improvements and modifications. 

Understand the Income Limits Set by the Federal Government

To qualify for a single-family home loan from the USDA, two important requirements need to be met. First, the borrower must meet the minimum income. Second, the home in question has to be in an eligible location. (More on property requirements below.) There are other requirements that we will elaborate on, but these are the big two.

Because income and property levels vary from state-to-state and county-to-county, the USDA does not set an income cap for the entire nation. Instead, they look at various regions and set an income level for that area of the country.

In the San Diego-Carlsbad region, for example, the “very low income” eligibility for one-person homes is $45,450, while the top amount for “low income” is $74,500. “Moderate income” is listed at $107,100. But if you have five persons or more in the home, the limits are raised. In this case, the “very low” is listed at $60,000, “low” is $98,350, and “moderate” is $141,350.

Just to the north, in Riverside County, the “very low” level is $33,500, while the “low income” is $53,600 and “moderate” is $78,200. For families or households with five persons or more, the “very low” is $44,200, “low” is $70,750, and “moderate” is $103,200.

The bottom line on income limits is this: you have to research your specific area to see the limits set for that region. There is no specific number for the entire country, so be sure to check your area to see if you qualify.

Side Note: Other Personal Requirements

At this point, we’d like to take quick moment to look at a few of the less-significant requirements for USDA loans. For the most part, these are obvious: you must meet citizenship requirements, be without decent housing, and unable to secure loans in another form. You’ll also have to agree to occupy the home for a specific period and not be currently suspended or barred from federal programs.

The Home in Question Also Matters

Most homes in small towns qualify for USDA loans.

If you meet the personal requirements for this program, the next step will be to make sure the home you are considering is also eligible. The purpose of the program is to help with the development of rural locations, so, in general, any homes in a population area with less than 35,000 people should qualify.

While the USDA is focused on farming and agriculture, the home doesn’t have to be on a remote country road to qualify. Homes in smaller towns (usually less than 35,000) are eligible, making USDA loans an option for many people across the country, not just farmers and ranchers.

To make sure the home you desire is eligible, you can use the USDA’s Income and Property Eligibility site. If you know the address of the home, simply type it into the system and you’ll be told whether or not it is eligible for a USDA loan. (You can also use the site to check local income limits and other information.)

Funds Can be Used for More than Just the Home Purchase

While the loans are often used for the purchase of a home, the USDA does offer financing options for property and house improvements. The loan you acquire through the USDA can be used to purchase and upgrade property. For example, it is possible to take out a USDA-backed loan that will cover the property itself as well as repairs to the water and sewage system.

The USDA also offers housing repair loans and grants, which are a good option if you already live in a rural area and need to make improvements to your property. This program offers a maximum loan of $20,000 and a maximum grant (which does not need to be repaid unless the property is sold in less than three years) of $7,500.

Contact a Mortgage Professional for More Information

If you want to learn more about USDA home loan and your specific eligibility, contact San Diego Purchase Loans today.

We’ll help you understand the USDA’s requirements and see if you could be eligible for a 100% loan-to-value mortgage that is supported by the USDA.


Outstanding experience

I was referred to Chad by my Realtor for a purchase of a new house. The experience with Chad and the team (I mainly worked with Juliann) was nothing short of outstanding. From start to finish there were always quick to respond and when needed, notify me of any new documentation that was required. There were very helpful explaining to me the pros and cons of different financing options as well as some other loan related issues, such as termite clearance outside the purchase contact and septic tank certification process. Overall, very knowledgeable and processional team. Loan preapproval was done in a single day and loan documents were ready for signing in 21 days, which was 9 days ahead of schedule. That never happened to me before.

Chad was very personable. His staff was very suportive.
I had the pleasure of working with Chads team. Everything went as planned. I was very pleased. I still want to take them to dinner. I am completely enjoying my new home”

Chad Baker and his team are amazing!

My husband and I found Chad through an article he had written. Every aspect of working with Chad and his team was exceptional. From our initial phone call where he explained the many options we had, to advice he gave in dealing with somewhat challenging sellers, and closing our loan ahead of schedule, the loan process with Chad and his team went very smoothly. I especially appreciated the one-on one guidance from Juliann, who really made me feel like I was her only client. I look forward to working with Chad and his team again and would highly recommend them to anyone looking for a mortgage.

I hope you enjoyed reading this article. It's my goal to keep you updated with the latest real estate mortgage news. I'm proud to provide you with 100% original and unique content. Subscribe now to get high quality real estate mortgage content and articles delivered directly to your inbox. Chad Baker is Regional Manager for LendUS. Chad is consistently recognized in the top 1% of mortgage originators in the United States 2011-2017. Got a question for Chad? Call (858) 353-8331 or submit your question online