Rural Mortgages


These are home loans specifically sponsored by the USDA, designed for those living in rural areas (not necessarily limited to farmers) who want to buy property or improve their houses.

Quick Summary

Similar in many respects to FHA loans, these home loans were created as part of the Rural Development program from the United States Department of Agriculture. There are three different categories of loans. One version allows you to get a more traditional mortgage with a lower interest rate and a small-to-no down payment. The second option provides a direct home loan from the USDA to those with particularly low incomes, mortgages that typically provide extremely low interest rates. The third option offers home improvement loans that can help to repair or upgrade homes.

Pros and Cons


-The best options for rural buyers. If you live in a rural area and have an average-to-low income, these home loans provide favorable terms that you may not be able to find anywhere else.

-Benefits for those with good credit. If your credit is good, you'll find it easier to qualify for these USDA mortgages and their many benefits.


-Requirements can sometimes be strict. In general, you must prove that you have a steady income (going back for a couple of years), a certain income range, and other financial factors before you can qualify for these loans.

-Loans are not always right for low-income applicants. While USDA loans can help extremely low income borrowers, adding more debt is not always the right call in these situations.

What Else Should I Know?

It's time to pull out the map: These USDAs are not decided by your occupation, but rather by where you live. The USDA actually provides a state-by-state map on what areas can qualify – and even if you live in or near a town, it's worth taking a look, because these boundaries can sometimes be generous. If you are in the right spot of the map, it's time to take a look at the income limits for your area. These limits vary based on location, and if your income is above a certain point (based on the number of people in your family) then you may not be able to qualify. Do your homework first, then start shopping for USDA loans!