Eligibility Requirements for the USDA Rural Development Program

The United States Department of Agriculture offers direct loans for low to very low income families to purchase homes and land in rural areas. These loans are offered as part of the Rural Home Loan Program so that people who live in rural areas can get a loan for affordable housing in these areas of low economic growth.

In order to get these loans you must meet certain eligibility requirements. The eligibility requirements for the USDA Rural Home Loan Program include:

Qualification Requirements

  • Your income must be below 80% of the median income for the area in order to get a loan. Below 80% of the median income is considered "low income", and below 50% of the median income is considered "very low income". You must fall into one of these categories to get a USDA rural home loan.
  • Families applying for the loan must not currently have housing that is adequate. This is based on family size. If a family of 5 is living in a two bedroom apartment then that is not adequate and they would be eligible for the loan.
  • The home being purchased or constructed must be a reasonable size for the size of the family. Oversized homes do not qualify for these loans.
  • Those people who apply for the loan must have a decent credit history. The USDA has certain credit requirements for their borrowers. The program is meant to help people who could not get a loan elsewhere because of income or down payment requirements which are lower with the USDA loan program because they offer subsidies, zero down payment, and low interest rates. This program was designed to help low income families who could not get a home loan anywhere else.
  • The borrower must be able to afford the mortgage payments.

Application Review

USDA Farm Family

The USDA Rural Development office will review your application and then give you a loan decision within 30 days. As long as you meet the eligibility requirements then your loan will be approved and you can begin looking for the home you want. Check out the rural development site for more information on this program.