The Gates That Decide It
Five questions come before the down payment.
USDA’s guaranteed program is not one rule. It is a set of published gates: where the home is, who lives in it and what they earn, whether it will be your home, whether you already own one, and how your credit and debts look.
Is the address in an eligible area?
The home must sit in a USDA-eligible rural area. USDA’s Eligibility Site lets you enter a specific address or browse the map; eligible areas include many small towns and communities outside major metro cores, not only farmland. Check the address before assuming either way.
Is the household under the county’s income limit?
Limits vary by county and household size. USDA’s FY 2026 Guaranteed Housing Program income-limit tables (HB-1-3555, Appendix 5) list a moderate-income guaranteed-loan limit of $122,800 for a household of one to four people and $162,100 for five to eight in many counties, with higher limits in higher-cost areas (USDA RD, file dated July 28, 2026). USDA announced the 2026 limits on July 13, 2026. Those figures are a common baseline, not a nationwide cap: verify your county and household size on the Eligibility Site.
Do you already own a home?
Owning a home is not an automatic denial. Under 7 CFR § 3555.151(e), current homeowners may be eligible when all of the listed conditions are met, including that the current home no longer adequately meets the household’s needs, the new home will be the primary residence, the applicants are not responsible for another USDA home loan at closing, they could not obtain the home without the guarantee, and no more than one other single-family dwelling is kept.
What about credit and debt ratios?
USDA RD says the program has no credit score requirement, but applicants must show a willingness and ability to manage debt. The regulation’s baseline ratios are 29% for housing costs and 41% for total debt, with room above that for compensating factors reviewed through USDA’s automated system or documented on a manually underwritten file (7 CFR § 3555.151(h)). A foreclosure completed, or a bankruptcy discharged, within 36 months of application is treated as significant derogatory credit that needs further review; a borrower in a Chapter 13 plan may get favorable consideration after 12 consecutive on-time payments with Trustee or court approval of the new credit (§ 3555.151(i)). Texana’s USDA page describes a common automated path around a 640 score with manual underwriting below that — that is lender process, not a USDA floor.
What does the guarantee cost, compared with FHA?
USDA charges the lender a guarantee fee that is usually passed to the borrower; the regulation caps the annual fee at 0.5% of the average unpaid balance, and USDA sets the current rates by notice (7 CFR § 3555.107). Texana’s USDA page describes a 1% upfront fee, which can be financed, and a 0.35% annual fee. For comparison, HUD Mortgagee Letter 2023-05 sets FHA’s upfront premium at 1.75% on most forward mortgages and an annual premium of 0.55% on many long-term, high-LTV loans. That is fee-structure education, not a rate quote.
