USDA Loan Programs

The Section 502 Guaranteed Loan is the flagship USDA purchase program and the one most homebuyers use. Funded by approved private lenders like 1st Florida Lending Corp and guaranteed by the federal government, it offers true 100% financing — no down payment whatsoever — with competitive 30-year fixed rates that often beat conventional pricing.

Household income must generally fall at or below 115% of your area's median income ($119,850 for 1–4 person households in most areas for 2026; $158,250 for 5–8 person households, with higher caps in high-cost counties). There is no maximum loan amount — your buying power is set by your income and debts, not by a government cap. Most lenders look for credit scores of 620 or higher, though manual underwriting is available for borrowers below that mark. Mortgage insurance costs are notably lower than FHA: a 1% upfront guarantee fee (financeable) plus a 0.35% annual fee.

The USDA Direct Loan is issued and serviced directly by USDA Rural Development rather than through private lenders, and it is reserved for low-income (at or below 80% of area median income) and very-low-income (at or below 50% AMI) households who cannot obtain affordable credit elsewhere. It is the most deeply subsidized home purchase program the federal government offers.

Through payment assistance subsidies, the effective interest rate can be reduced to as low as 1%, and repayment terms extend to 33 years — or 38 years for very-low-income applicants who need the lower payment. No down payment is required, and area loan limits apply based on the county where the home is located.

The USDA Construction Loan lets you finance the land purchase, construction costs, and your permanent mortgage in a single loan with a single closing — all with no down payment. When the home is complete, the loan automatically converts to a standard 30-year fixed USDA mortgage with no second closing, no requalification, and no additional closing costs.

During the build, an interest reserve can be structured so you typically make no monthly payments until construction is finished. Your rate is locked before construction begins, protecting you from market movement during the build. The builder must be an approved, licensed, and insured contractor, and the completed home must meet USDA property and location requirements.

The Streamline-Assist Refinance is USDA's flagship refinance option for homeowners who already have a USDA loan. It was designed to remove nearly every traditional refinance hurdle: no new appraisal, no credit report review, no debt-to-income calculation, and no home inspection are required in most cases — even if your home's value has dropped or your income has changed since purchase.

To qualify, your existing USDA mortgage must have been paid on time for the previous 12 consecutive months, and the new loan must reduce your total principal, interest, and annual-fee payment by at least $50 per month (the “net tangible benefit” test). Closing costs and the upfront guarantee fee can be rolled into the new loan, so most homeowners refinance with little or no cash out of pocket.

The Standard Streamline Refinance is the companion option to Streamline-Assist for existing USDA borrowers. Like Streamline-Assist, it typically requires no new appraisal — but it differs in two important ways: your credit and debt-to-income ratios are reviewed, and there is no $50 minimum monthly savings requirement.

That flexibility makes the Standard Streamline the right tool when your situation has changed — for example, when you need to remove a co-borrower after a divorce, add a spouse to the loan, or refinance into a lower rate that saves less than $50 per month but still makes long-term financial sense. On-time payment history for the previous 12 months is still required, and the new loan amount generally cannot include cash out.

The Section 504 Home Repair program helps very-low-income homeowners (at or below 50% of area median income) in eligible rural areas repair, improve, or modernize their homes. Loans of up to $40,000 carry a fixed interest rate of just 1% repaid over 20 years — a $40,000 loan costs roughly $184 per month.

Homeowners age 62 or older who cannot afford to repay a loan may instead qualify for a grant of up to $10,000 (lifetime limit) to remove health and safety hazards. Loans and grants can be combined for up to $50,000 in total assistance — and up to $55,000 in presidentially declared disaster areas, where the grant cap rises to $15,000. Eligible projects include roof replacement, heating and electrical systems, plumbing, wells and septic, weatherization, and accessibility modifications such as ramps.