USDA Loans

A USDA loan is a mortgage guaranteed by the U.S. Department of Agriculture for homes in eligible rural and suburban areas. It is designed for households with low to moderate income who will live in the home.

Justin Lazzaro, NMLS #1229453 | Reasy Financial, LLC, NMLS #2446155 | Licensed in Arizona, Pennsylvania, Florida, and Texas

Who a USDA loan fits

Eligibility depends on three things: where the home is, what your household earns, and whether you will live there.

Buyers outside major cities

Many small towns and suburban areas qualify, including places people do not think of as rural. I check the address on the USDA map.

Moderate-income households

Household income has to fall within the limit for the county and household size. Income from everyone in the household counts toward the limit, with some exclusions.

Who it usually does not fit

Homes in ineligible areas, households above the income limit, and second homes or rentals. FHA or conventional is the usual alternative.

How qualifying works

1

We check property and income

I confirm the address is in an eligible area and compare your household income to the county limit before anything else.

2

The lender underwrites the file

Your file runs through USDA automated underwriting and is reviewed by the lender's underwriter.

3

USDA issues its commitment

After lender approval, USDA Rural Development usually reviews the file and issues a conditional commitment, which adds some time. Some lenders are now approved to give final approval on USDA's behalf.

I am a mortgage broker, not a government agency. USDA guarantees the loan, and approved private lenders provide the financing.

How it compares to other loans

The main differences between these loans are where you can buy and who is eligible.

How USDA loans compare to other loan types
Loan typeWhere and whoMortgage insurance
USDA loansEligible rural and suburban areas, within household income limitsAn upfront guarantee fee and an annual fee
FHA loansAny area, primary residencesUpfront and monthly premiums
Conventional loansAny area, any occupancy typeOnly with a smaller down payment
VA loansAny area, eligible veterans and service membersNone, though most borrowers pay a one-time funding fee

Three things to know before you apply

1

Two income tests apply

One test decides whether your household is eligible for the program. A separate calculation decides whether you can repay the loan.

2

Allow extra time

Because USDA usually reviews the file after the lender does, I build extra days into the contract timeline.

3

Eligibility maps change

Areas can lose eligibility when USDA updates its maps. A property that qualified last year may not qualify today, so I verify first.

Guidelines change. I confirm current requirements with the lender before quoting anything.

Common questions about USDA loans

Short answers to common questions. Program rules vary by lender, so treat these as general guidance, not a loan decision.

How do I know if a home is eligible?

USDA publishes a property eligibility map. Send me the address and I will check it along with the income limit for that county.

Whose income counts?

For program eligibility, income from everyone in the household counts, even people who are not on the loan. Some income is left out, such as a minor's earnings, and certain deductions apply.

Do I have to be a first-time buyer?

No. You generally cannot own another suitable home at the time of closing, and the new home has to be your primary residence.

Are there fees like mortgage insurance?

Yes. USDA charges an upfront guarantee fee, which can be financed, and an annual fee that is paid monthly.

Can I refinance a USDA loan?

Yes. Streamlined options exist for current USDA borrowers. USDA does not offer a cash-out refinance.

Where do you offer these loans?

I am licensed in Arizona, Pennsylvania, Florida, and Texas, and I work with wholesale lenders that offer USDA financing.

Ready to talk it through?

Pick a time that works for you. We'll go over your goals and next steps, no pressure, just a conversation. Prefer to call or text instead? Reach me directly at (412) 638-4982, or book a quick Zoom if that's easier.