Rural Development
USDA Rural Housing Loans

The rural housing loan program is sponsored by the USDA to assist low to moderate income families wishing to purchase a rural home with no down payment or to refinance an existing rural housing loan. Closing costs can be financed in the loan amount up to the appraised value of the home. Texas rural housing properties must be located in a designated rural area and borrowers must meet income limits set by the Rural Development program.

Pros Cons
  • No Down Payment Required
  • Finance Closing Cost up to appraised value
  • Loans up to 102.00%, to finance the guarantee fee
  • Low Interest Rates
  • No Mortgage Insurance
  • Borrowers must meet income limits set by the USDA program
  • Properties must be in a designated rural area
  • Requires manual underwriting
  • Requires a 2.0% guarantee fee
  • 1 unit owner occupied primary residence only


Rural Development Guidelines Summary
Purpose Occupy Units Max. LTV/
CLTV (2)
Max. Loan
Purchase Primary
1 102.00% $417,000 29/41
Refinance (1)
1 102.00% $417,000 29/41

  • Automated Underwriting - Not allowed. Requires manual underwriting. This loan program requires two loan approvals, one from the lender and one from USDA. It takes about two weeks for the loan approval process.
  • Bankruptcy or Foreclosure - Requires a minimum of 3 years from the bankruptcy discharge date or the date of the foreclosure.
  • Closing Costs - Closing costs can be financed up to the appraised value of the home.
    NOTE: Prepaid interest and discount points cannot be financed, but can be paid by the seller.
  • Credit Scores - Our minimum credit score is 640.  If your scores are below 640 you will need credit repair to see if your scores can be raised enough to qualify.
  • Down Payment - Zero...No down payment required.
  • DTI Ratio - USDA loans use two qualifying ratios, 29/41.
    A maximum of 29% of your gross monthly income can be used to pay your new house payment, including taxes and insurance(PITI) and,
    A maximum of 41% of your gross monthly income can be used to pay all of your monthly debts, including your house payment(PITI). With compensating factors these ratios can be stretched a little higher.
  • Escrows - Taxes and insurance must be escrowed with the lender.
  • Guarantee Fee - Purchase and Refinance loans require a 2% guarantee fee based on the final loan amount plus a 0.5% annual fee paid monthly as a part of your monthly payment.

    The guarantee fee can be financed in the new loan amount. (see LTV below)
  • Income Limits - USDA loans limit the gross income your family makes depending on the number of family members and the location of the new property.
    Click here to look up the maximum income your family can make Icon - Opens in New Window
    (Requires Internet Explorer 5.0+ or Netscape 4.76+ to view this site)
  • Loan Terms - Only 30 year fixed rate loans.
  • LTV - The maximum LTV is 100% plus any portion of the guarantee fee that is financed. Closing costs may be financed in the new loan amount up to the appraised value. Loan amounts may not exceed the appraised value .
  • Manufactured Homes - Single-wide and Double-wide manufactured homes are NOT eligible.
  • Minimum Loan Amount - $75,000.
  • Mortgage Insurance - Not Required. (see Guarantee Fee above)
  • Occupancy - Borrower must occupy the home within 60 days after closing.
  • Pools - In-ground pools are allowed as long as loan funds are not used to finance the contributory value of the swimming pool.
    • Appraisers must determine the contributory value of an operable in-ground swimming pool and subtract that amount from the appraised value before the maximum loan amount is calculated.
    • If the in-ground pool has no contributory value because it is inoperable, no changes to the maximum loan amount are necessary.
  • Property Eligibility - Only properties located in a designated RURAL area are eligible for USDA financing.
    Click here to look up the property address to determine eligibility or you can look at general maps for your area Icon - Opens in New Window
    (Requires Internet Explorer 5.0+r or Netscape 4.76+ to view this site)
  • Property Types - Single family, 1 unit homes, townhomes, approved Condos and PUDs.
    Condo projects must be approved by HUD, VA, FNMA or FHLMC and served by an HOA.
    NO 2-4 unit multi-family properties.
  • Seller Concessions - Are limited to 6% of the sales price. The closing costs can be paid by the seller, paid by the lender with overpar pricing or financed(providing the appraised value is high enough to support inclusion of the costs).
Guidelines subject to change without notice. Additional guidelines and restrictions may apply.


USDA Rural Housing Purchase Loan Rates
Rates based on $200,000 Loans
30 Year Fixed Loans
30 day lock.
Rate Points APR
3.000% -1.951% 4.008%
3.250% -3.020% 4.254%
3.500% -3.194% 4.501%
Maximum loan amount is $417,000, including a
  2% guarantee fee, if financed.
Eligible borrowers must meet USDA income
Eligible properties must be in a designated
   USDA rural area.
Closing costs can be financed up to appraised
Credit Scores:
>700 = subtract 0.25% pt.
640 - 660 =  add 0.25 pt.
640 Minimum.
Additional adjustments & restrictions may apply <> Contact us for an analysis and estimate
Notes for rates

Lock your rate at 888-623-7083 or in Austin call 512-259-7788...
Rates are subject to change without notice until locked in.
Rates on this Page Last Updated:


  • This is a short form that only takes a few minutes to complete.
  • It will give us the info we need to pre-qualify you according to your income, debts and funds available for down payment and closing costs.
  • The results will be emailed to you with an estimate for your review.
  • The Pre-Qualify form is primarily designed for borrowers with good credit since NO credit report will be pulled with this prequalification.

Email or call us if you need additional information.

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Second Homes
Rental Properties

NOT ALLOWED. Only owner occupied primary residences are eligible for USDA financing.

Refinance Loans?

Only available for existing USDA loans. Property must still be an owner occupied primary residence.

Borrowers must qualify for the refinance loan.