USDA Loan Changes and Options


Many people are unaware of the U.S. Department of Agriculture mortgage program. USDA home loans don’t require down payments and are available for eligible rural and suburban homebuyers. Read on to see if this program would be a good fit for you and your household.

USDA Loan changes and options - USA Mortgage

What are the USDA income limits?

USDA loans are made to help people achieve homeownership who may not be able to purchase a home otherwise. To make sure the loans go to people who really need them, the USDA sets income limits, which is a key part of qualifying for a USDA loan.

Income is based on the entire household, unless the household member is a minor, a full-time student earning more than $480 a year, or a live-in aid. Tax credits and lump sums, such as inheritances, are also excluded from the income calculation. USDA’s gross income calculation does include all salaries, overtime, commission, tips, and bonuses. The USDA looks at the amount earned before payroll deductions are applied.

The USDA income limits vary from place to place. In most parts of the country, households with four members or less have a yearly income cap of $82,700, and the limit sits at $109,150 for households of five members or more. You can view the limits in your area with the USDA’s interactive map.

 Who can qualify for USDA loans?

The income limit isn’t the only requirement for USDA qualification. You must also be a U.S. citizen, be able to afford a monthly payment that’s no more than 29 percent of your monthly income, prove consistent income for the last 24 months, and have a good credit history. You also have to reside in a rural area, although some suburbs are included in the program. It’s also important to note that you do not have to be a first-time homebuyer to qualify for a USDA loan.

How can I get 100% financing?

If you qualify for a USDA loan, you are likely eligible for 100 percent financing. If not, there are other options for you to consider.

  • MHDC loans. The Missouri Housing Development Commission (MHDC) provides assistance to if you aren’t in the position to make a down payment on a house. MHDC has a few different options, including the First Place Loan Program and the Next Step Program, both of which offer cash assistance loans. For more information, visit the MHDC website.
  • City of Columbia Grant. The City of Columbia can help low-to-moderate income families purchase a home. To qualify, you must be a first-time home buyer or a single parent, purchase a home within the Columbia city limits and fit the program’s income guidelines. The grant will loan up to $7,500 or 7.5% of the purchase price, whichever is less.

The American dream of homeownership may feel out of reach, but that’s why these programs exist. Everyone deserves to live in a home they love, and these local and national programs can make that dream a reality. If you’re not sure which financing option is right for you, let me know. I’d love to help you through the process.

Michael Vanella

Michael Vanella

Mortgage Loan Originator at USA Mortgage Abadi Region