USDA Loan Requirements | USDA Guidelines for Home Loans

The USDA loan minimum credit score depends on the lender, which some lenders have tougher USDA loan requirements.
USDA loan income requirements are set by United States Department of Agriculture.
There are USDA grants available to home buyers, which are sometimes not necessary because USDA loans and borrowers are eligible for 100% financing.
Borrowers will have a higher chance of getting pre-approved for a loan when amortgage company goes by USDA guidelines for home loans.

USDA Loan Minimum Credit Score

Minimum credit scores are set by the mortgage company and USDA guidelines for home loans.
Some mortgage companies have an internal rule called an overlay that sets higher credit standards.
- For example, some lenders will require a 640, 620, or 600 credit score.
The USDA minimum credit score for Nationwide Mortgage & Realty, LLC is 550 FICO.
- FICO’s under 640 require a manual underwrite.
The maximum debt-to-income ratios are determined by the Guaranteed Underwriting System (GUS).
Non-traditional credit is permitted when there is a lack of trade lines.

Two year history for employment is required.
Maximum housing ratios are 29/41 and ratio waivers do not apply with a credit score under 640 FICO.
With higher credit scores, the debt-to-income ratios are determined by GUS.
USDA income limits must be met by the United State Department of Agriculture.
Steps on how to use the USDA income eligibility tool:
1. Ask a Loan Originator to help or click on the USDA income eligibility link.
2. Pick a state.
3. Pick a county.
4. Fill in the following fields:
  - Number of People in Household.
  - Number of Residences Under 18 Years Old, Disabled or Full Time Students.
  - Is Loan Applicant or Co-Applicant Age 62 or older?
  - Are there any disabled Persons Living in the Household?
5. Fill out income.
6. Click finish to determine USDA loan income requirements and eligibility.

The United States Department of Agriculture’s website has a property eligibility section that determines if properties are located in an eligible rural area.
The tool is as easy as putting in an address and finding out either:
- The address is not located in an eligible rural area.
- The address is located in an eligible area.
See bankruptcy, foreclosure, short sale waiting periods.

USDA loans do not require a minimum borrower cash investment, but USDA grants can help pay for the down payment and closing costs.
The USDA grants are 3% of the first total mortgage loan amount.
Limited to 1 unit only.
The minimum credit scores for the USDA grants is 640 FICO.
Debt-to-income ratios are determined by GUS.