A USDA loan is a zero-down, government-backed mortgage for primary residences in eligible rural and suburban areas. Borrowers pay no down payment, benefit from below-market mortgage insurance (a 1% upfront guarantee fee and 0.35% annual fee), and lock in a competitive 30-year fixed rate.
What is a USDA?
USDA Rural Development loans are government-backed mortgages designed to make homeownership accessible in eligible rural and suburban areas. Backed by the U.S. Department of Agriculture, they require no down payment and offer below-market mortgage insurance, making them one of the most affordable paths to ownership for qualified buyers.
ASB Capital Loan Funding originates USDA loans nationwide for purchases and refinances in eligible areas. If your target property sits just outside a major metro — where many of today's most affordable homes are located — a USDA loan could be your lowest-cost financing option.
Program Highlights
- 0% down payment required
- Below-market mortgage insurance (guarantee fee)
- Competitive fixed rates
- No maximum purchase price limit
- Closing costs can be gifted or financed
- Available in eligible rural & suburban areas
Who This Loan Is For
- •First-time and repeat buyers in eligible areas
- •Moderate-income households (under area income limits)
- •Buyers with limited cash for a down payment
- •Purchasers in small towns and suburban fringes
Typical Requirements
- •Property must be in a USDA-eligible area
- •Household income at or under the local USDA limit
- •Stable, dependable income (typically 2+ years)
- •Credit score 640+ (flexible underwriting below)
- •Property must be a primary residence
- •U.S. citizenship or eligible residency
Key Terms to Know
- USDA Loan
- A zero-down government-backed mortgage for eligible rural and suburban primary residences, offered to moderate-income households.
- Guarantee Fee
- USDA's mortgage insurance: a 1% upfront fee (financeable) and a 0.35% annual fee, both lower than comparable FHA costs.
- Eligible Area
- A rural or suburban region meeting USDA population-density guidelines. Eligibility is verified by property address.
See our FAQ and loan resources for more definitions and checklists.