USDA Loan 2026: 0% Down, Outside the City
Updated: September 17, 2026 | By James Chen | Editorially reviewed against primary government and agency sources
Zero down, no PMI-style pricing, and 97% of US land qualifies. The USDA loan is the hidden 0%-down option for buyers outside big cities — income limits are the only real catch.
USDA Loan Key Numbers (2026)
0%
Down payment required
115%
Income cap (% of AMI)
6.40%
30Y avg rate (Aug 2026)
1% + 0.35%
Guarantee fee: upfront + annual
640
Credit score target
97%
Of US landmass eligible
What $300K costs on a USDA loan
0% down, 6.4% for 30 years: $1,877/mo principal & interest + $88/mo guarantee fee + taxes & insurance. The 1% upfront ($3,000) rolls into the loan. Total around $2,100/mo — and no PMI to remove later, ever.
Run your USDA payment →USDA loan resources
- • USDA loan requirements — full eligibility breakdown
- • USDA calculator — payment with guarantee fee
- • USDA rates today
- • Zero-down options compared — USDA vs VA vs FHA
Frequently Asked Questions
What are the USDA income limits for 2026?+
Household income (all adults, not just borrowers) is capped at 115% of the area median income. A family of four in a moderate-cost county might cap at $110-130K; high-cost counties run higher. The limit varies by county and household size — check the USDA eligibility page with your address before falling for a house.
Where can I use a USDA loan?+
USDA loans are for "rural" areas, but the map is generous — roughly 97% of US landmass qualifies, including many suburbs. Cities over ~35,000 population are typically excluded. Plug an address into the USDA eligibility map; most exurban and small-town listings qualify.
What credit score does USDA require?+
USDA wants 640 for standard approval, though some lenders take 620 with compensating factors (low DTI, high savings). There is no minimum down payment and no loan-level price adjustment for lower scores, but expect rate adjustments below 660.
How much is the USDA guarantee fee?+
1% of the loan upfront (rolled in) plus 0.35%/year of the remaining balance, paid monthly. On a $300K loan that is $3,000 upfront and about $88/mo in year one. It is cheaper than FHA MIP (1.75% + 0.55%) and comparable to conventional PMI at 0.3-0.8%.
USDA vs VA loan: which is better?+
Both offer 0% down. VA wins on cost if you qualify: no upfront fee for disabled vets, no income limit, and rates average 0.3% lower (6.125% vs 6.4%). USDA is the answer for non-veterans in eligible areas — 0% down with a 1% fee beats FHA's 3.5% down + 1.75% fee for qualified buyers.