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How to Apply for a USDA Home Loan

by Christopher Raines, studioD

The U.S. Department of Agriculture, or USDA, can help you find a home if rural life suits you. If you or your family have little income and cannot get a loan from a bank, you can get a loan directly from the government through the Direct Housing Loan Program. Purchasers with modest income, but not low enough for a regular loan, can find a USDA-backed, no-money down loan from a private lender through the Guaranteed Housing Loan Program.

Browse USDA's website (usda.gov) to determine if your desired home lies in a rural area. Click on the “Single Family Housing” link under “Property Eligibility.” Enter the address in the “Find Your Address” field above the map. You will see a text balloon indicating whether your property is eligible for a USDA loan; the map will also shade ineligible areas in brown.

Find out if you qualify for either program based on income. Select the “Single Family Housing” link under Income Eligibility. Scroll down to your state under “Property Location,” then pick the county where the desired home is located. Enter the requested information, including your household size and monthly income before taxes. Click “Finish” to see the “Income Eligibility Determination Summary,” including your eligibility and the income limits.

Complete the Uniform Residential Loan Application, Form RD410-4, to apply for a direct loan. Contact or visit your local Rural Development Office for assistance and to submit the application; go to the Rural Development main web page, find the “Agencies and Offices,” link and choose “USDA Service Centers” to find a local office. Apply for guaranteed loans through a lender approved by the USDA; click on “Warning about ‘endorsed’ lenders” and find the “USDA Rural Development certified lending institutions” link for a list of approved lenders.


  • For the Guaranteed Loan Program, the monthly interest, insurance and taxes must not exceed 29 percent of your monthly income and your total debt, including the mortgage, cannot exceed 41 percent of income.


  • The USDA is stringent in its foreclosure policies. If you default on a USDA home loan, the agency pays off the lender but will pursue you for the money paid. It has the ability to garnish wages and income, including Social Security and Social Security Disability payments.

About the Author

Christopher Raines enjoys sharing his knowledge of business, financial matters and the law. He earned his business administration and law degrees from the University of North Carolina at Chapel Hill. As a lawyer since August 1996, Raines has handled cases involving business, consumer and other areas of the law.

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