USDA Loans for First Time Home Buyers in Florida - Apply today! and Get preApproved

What Is A USDA Loan Program?

In 1991 USDA (The United States Department of Agriculture) started offering loans for the development of rural and suburban areas to home buyers with low-to-average income for their area. They offer financing with no down payment, reduced mortgage insurance, and below-market mortgage rates.

USDA mortgage are offered for improving the economy of rural America.

USDA mortgage program is helping first time home buyers in Florida who never thought they could do anything but rent due to their low income and absolutely no savings.

USDA loans are mainly for home borrowers who aren't wealthy and can’t get a traditional mortgage.

Some key features of USDA programs are as follows:

  • Flexible credit guidelines : Qualify with credit score of 640. Well if you can show reserves and income consistency you can get on the program with as low as 500.
  • Low interest rates : Interest rates on USDA programs are capped by USDA itself and are best amongst other programs.
  • 30 year fixed rates : Fixed mortgage terms insures stability with mortgage payments.
  • Low Mortgage Insurance : USDA has 0.35% mortgage insurance compared to 0.85% for FHA loan.
  • Government guaranteed : Helps in getting qualified for 0 down.
  • Ability to roll in your closing costs : Closing costs can be anywhere from 0-6% on a USDA loan. These costs can be completely rolled in your mortgage.

Application Form

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2021 Updates - USDA Home Loan Requirements for 0% Down

Credit requirements
  • Minimum score: 500 (conditions apply)
  • Ideal score for USDA: 640, and the USDA application will go through automated approval system.
  • Not all lenders know this program in depth, so be careful in picking one.
Bankruptcy / Credit Events
  • Chapter 7 BK: 2 years from discharge.
  • Chapter 13 BK: last 12 on time payments with court permission.
  • FC/SS/DIL: 3 years
  • Mortgage Late Payments: 12 months with no more than 1 30-day late.
Mortgage Rates
  • Low and compareable to VA and FHA.
  • Brokers may get you better rates.
  • Conv 2.75%, USDA 2.375%
Mortgage Insurance

Done on a 200K loan

  • 0.35% monthly
  • Funding Fees: 1% or $2,000/-
  • You can payoff or refinance to get rid of MI

Loan guarantees: The USDA guarantees a mortgage issued by a participating local lender, allowing you to get mortgage without any down payment and that too at lower interest rates. If you put little or no money down, you will have to pay a mortgage insurance premium, though.

Direct loans: Issued by the USDA, these mortgages are for low- and very low-income applicants. Income thresholds vary by region. With subsidies, interest rates can be as low as 1%.

Home improvement loans and grants: These loans or outright financial awards permit homeowners to repair or upgrade their homes. Packages can also combine a loan and a grant, providing up to $27,500 in assistance.

  • US Citizen : USDA loans are offered only to United State citizens (or permanent resident).
  • Credit Score : Ideally 640+ credit score is required, but you may qualify with a lower credit score also.
  • Income Stability : Ideally should have a consistent income for 24 months.
  • Income Limits : Home buyers income must be within the prescibed limits. Income limits change from county to county.
  • DTI Ratio : Debt-to-income ratio cannot exceed 41% of your total income. If you have a score of 680+ the USDA may consider higher debt-to-income ratio.
  • Monthly Payment : Applicants mortgage payment including taxes and insurance should not exceed 29% of total income.
  • Residence : Applicant must be willing to live in the home they are about to purchase.

Apart from home buyers eligibility, the property should also be in a location eligible for USDA loan. Metropolitan areas are excluded from eligible areas, nearby areas may qualify for the USDA program. If you are willing to go for USDA mortgage make sure to check the USDA eligibility of the property. One more thing as per USDA guidelines is that the property itself cannot be an income producing if you want to avail this program.

The best way to get started is by doing a home search from the list of properties which are listed for sale and are also in an eligible zone.

Multi-unit houses will not qualify for a USDA loan. Moreover USDA mortgage cannot be availed for vacation homes, investment property or a property having a working farm.

With a USDA loan, you don't have to make a down payment. This is one of only two major loan programs (other being VA loan) that allow zero-down financing. Some of other benefits are listed below:

  • Flexible credit guidelines : You can qualify with credit scores as low as 640, if your credit is less than that try to improve and get past that number as USDA might not approve your loan.
  • Low interest rates : Low mortgage Rates that have a maximum cap determined by USDA.
  • 30 year fixed rates : Fixed mortgage terms insures stability with mortgage payments.
  • Government guaranteed : Helps in getting qualified for 0 down
  • Low Mortgage Insurance : USDA has 0.35% mortgage insurance compared to 0.85% for FHA loan.
  • Ability to roll in your closing costs : Closing costs which can be anywhere from 0 – 6% can be rolled in your loan amount.

Click the number below to talk directly with an USDA loan expert.

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