U.S. Department of Agriculture — Rural Development
USDA Single Family Housing Loan (Section 502) Review 2026
0% down payment for eligible rural and suburban properties — an underused program most buyers don't know they qualify for.
Who USDA Single Family Housing Loan (Section 502) is best for
Buyers targeting rural or qualifying suburban properties with household incomes up to 115% of area median income.
At a glance
- Min. down payment
- 0%
- Min. FICO
- ~640
- Income limit
- ≤115% AMI
- Key restriction
- Property + income eligibility required
No down payment required for eligible buyers and properties
USDA does not set a minimum; most lenders require 640+ for automated underwriting
Varies by county and household size — verify at rd.usda.gov eligibility maps
Property must be in a USDA-eligible area (rural/suburban map); income limits apply
Pros
- +0% down payment — no cash required for down payment
- +Annual guarantee fee of 0.35% (much lower than FHA MIP) cancellable at 80% LTV
- +Many suburban and small-city areas qualify — not limited to remote rural locations
- +Competitive interest rates; government guarantee reduces lender risk
Cons
- −Property and income eligibility requirements narrow the field — not every buyer or home qualifies
- −Primary residence only; manufactured homes have separate eligibility rules
USDA Single Family Housing Loan (Section 502) requirements
- US citizens and eligible non-citizens
- Household income ≤115% of area median income
- Property must be in USDA-eligible area (verify at USDA eligibility maps)
- Primary residence only
USDA Single Family Housing Loan (Section 502) alternatives
Top alternatives worth comparing from Best Mortgages for First-Time Homebuyers 2026.
U.S. Department of Housing and Urban Development (HUD) — Federal Housing Administration
FHA 203(b) Mortgage
First-time buyers with 580–679 FICO scores who need a flexible, federally backed path to homeownership.
U.S. Department of Veterans Affairs
VA Home Loan
Active-duty service members, veterans, and surviving spouses looking for the lowest-cost path to homeownership.
Fannie Mae (FNMA) — available through any Fannie Mae-approved lender
Conventional 97 (3% Down Conventional)
Buyers with 620+ FICO and stable income who want to avoid FHA's lifetime mortgage insurance and have no income-limit concerns.
Ready to apply?
Application takes minutes. Pre-qualification (where available) uses a soft credit pull with no impact to your credit score.
Apply at U.S. Department of Agriculture — Rural Development→Last verified at the issuer on 2026-08-05
The full lineup
See all picks in Best Mortgages for First-Time Homebuyers 2026
Editorial methodology + complete ranking criteria + side-by-side comparison of all picks.
Read the full guide →Bottom line
USDA Single Family Housing Loan (Section 502) scores 4.0 / 5 on the ClearValue Rating — a deterministic editorial composite from the product's own published fees, terms, and eligibility. Best for: Buyers targeting rural or qualifying suburban properties with household incomes up to 115% of area median income.
◆ How we scored it
The ClearValue Rating, broken down.
- Cost
- 35%
- Fit & approval odds
- 30%
- Speed & terms
- 20%
- Transparency
- 15%
Cost (35%), Fit & approval odds (30%), Speed & terms (20%), Transparency (15%) — scored consistently across every product, independent of compensation. Full methodology →
Frequently asked
Questions about USDA Single Family Housing Loan (Section 502)
Who is the USDA Single Family Housing Loan (Section 502) best for?+
It's best for buyers targeting rural or qualifying suburban properties with household incomes up to 115% of area median income (AMI). Because it requires 0% down, it suits buyers with limited cash for a down payment whose chosen home falls inside a USDA-eligible area.
Do I really need 0% down for a USDA loan?+
Yes — the program requires no down payment for eligible buyers and properties, which is its defining feature. You'll still need funds for closing costs, though some can be financed or covered by seller concessions. Confirm specifics with a USDA-approved lender.
What credit score does the USDA loan require?+
The USDA does not set a minimum FICO score, but most lenders require around 640 or higher to use automated underwriting. Borrowers below that may still qualify through manual underwriting at lender discretion — confirm directly with the lender.
How do I know if a property qualifies for a USDA loan?+
The property must sit in a USDA-eligible area on the USDA rural/suburban map, and your household income must be at or below 115% of area median income for your county and household size. Both limits vary by location — verify them on the eligibility maps at rd.usda.gov before applying.
How do I apply for a USDA Section 502 loan?+
ClearValue is a neutral information platform, not a lender. You apply through a USDA-approved lender; you can review the program and find participating lenders via the USDA Rural Development page at rd.usda.gov/programs-services/single-family-housing-programs.
Related guides
Independent editorial review. ClearValue Lending is a business & personal financing platform — not a lender, broker, or financial advisor. Some links are affiliate links; the issuer may pay a referral commission at no cost to you, which never changes the score. Specific product terms vary; verify with the issuer before applying. See privacy policy.