USDA Mortgages

January 13, 2010

A USDA mortgage is one insured by the US Department of Agriculture, for which eligibility is limited to properties in rural areas and to borrowers with incomes below maximums set for each area.

The USDA program is very similar to the VA home mortgage program in that both allow loans with little or no down payment and limit eligibility to those targeted by the program. In addition, both programs charge borrowers an upfront fee designed to cover losses, which is typically included in the loan balance. Both programs are usually less costly to the borrower than a comparable FHA, but with 20% down, they are more costly than a comparable conventional mortgage. For other comparisons, see Are VA Loans a Good Deal?

Additional information can be found at

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