What Is a USDA Loan?

The U.S. Department of Agriculture's Rural Development program guarantees loans for moderate-income buyers in designated rural and suburban areas. The flagship product — the Section 502 Guaranteed Loan — offers:

  • 100% financing (zero down payment)
  • 30-year fixed rate
  • No PMI (replaced by an annual guarantee fee of ~0.35%)
  • Competitive rates
0%
Down payment
0.35%
Annual fee
640+
Credit minimum
115%
Of AMI income cap

Eligible Areas in Florida

USDA eligibility is determined by zip code and census tract, not by feel. Surprising portions of Florida qualify — including most of the Treasure Coast outside of major cities, the Nature Coast, parts of Polk County, North Florida, and much of the Panhandle. Towns like Lake Wales, Sebring, Crystal River, Palatka, and Macclenny are USDA-eligible; even some suburbs of Jacksonville and Tampa qualify.

The USDA maintains an interactive map at eligibility.sc.egov.usda.gov. We check eligibility for every borrower's target area at no cost.

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Surprising USDA-Eligible Areas

Most of Florida outside the urban cores qualifies — including towns near Tampa, Jacksonville, and Orlando. Check the map before assuming you don't qualify.

Income Limits

USDA caps household income at 115% of the area median income. For most of Florida in 2025 that's around $112,000–$120,000 for a 1–4 person household, higher for 5+. The income test counts everyone in the household — including non-borrowing adults' income — so a roommate or adult child's earnings can push you over.

Property and Borrower Requirements

  • Owner-occupied primary residence only. No investment properties, no second homes.
  • Single-family or USDA-approved condo. Manufactured homes allowed in some scenarios.
  • Property must meet HUD Handbook 4000.1 standards — similar to FHA's minimum property standards.
  • Credit: 640+ for automated approval; lower with manual underwriting.
  • DTI: 29/41 standard, with ratios up to 32/44 allowed with compensating factors.
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Income Test Counts Everyone

USDA counts the income of every adult in the household — not just the borrowers. A working roommate or adult child can push you over the cap.

Costs You'll Pay

  • Upfront guarantee fee: 1% of loan amount (financed into loan).
  • Annual guarantee fee: 0.35% of loan balance, paid monthly. Lower than FHA's MIP and stays for the life of the loan.
  • No down payment. Closing costs can be rolled in if the appraisal supports it.

Want to know if your target area qualifies? We check eligibility for free.

Ask About USDA →

When USDA Beats Other Loans

USDA is the strongest option when you're:

  • Buying in a rural or suburban Florida area
  • Earning under the income cap
  • Light on savings (no down payment + closing costs financed)
  • Open to a slightly slower close (USDA underwriting adds 5–10 days vs. Conventional)

Compared to FHA, USDA wins on monthly cost when you qualify. Compared to VA, USDA loses for veterans. Compared to Conventional 3%, USDA usually wins on monthly payment but loses on speed.

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