USDA Guaranteed Rural Housing Program

The USDA Guaranteed Rural Housing Program is a true zero down (100% financing) mortgage program. It is designed to help people purchase homes in less populated (rural) areas. It cannot be used to buy a working farm or other income producing properties.

As with all government insured mortgages, the USDA has an upfront guarantee fee as well as an annual fee that is paid as part of a borrowers monthly mortgage payment. As of October 1, 2016, the upfront fee is 1% and the annual fee is .35%. The upfront fee can (and is usually) wrapped in as part of the initial loan amount.

The USDA program is location restrictive. You can find out if a specific property is eligible for USDA financing by searching for your property at the following link: 

The USDA program is also income restrictive. Income requirements vary by county as well as the number of people living in the household. Income restrictions apply to household income, not just the borrower(s)' income. You can see if your income qualifies for the USDA mortgage at the following link:

The USDA program also has a very unique feature in that a borrower can finance their closing costs of the mortgag on a purchase transaction, if the property appraises for more than the contract price. For example, if a borrower was under contract to buy a home for $200K but it appraised for $205K, the borrower would be allow to roll the closing costs into the new loan up to the appraised value of $205K. This unique feature is only available with the USDA Guaranteed Rural Housing Program.