The three questions nearly everyone asks: "Do I have to live rural?" No — 90%+ of California qualifies. "Is it really $0 down?" Yes — 100% financing. "What's the income limit?" ~$119,850 for 1–4 people (higher in costly counties), using adjusted income. Details below and on Eligibility and Requirements.
Eligibility & areas
Do I have to live in the country?
No. USDA covers rural and many suburban areas — over 90% of California by location. Many towns near cities qualify. A map check confirms an address.
Do I have to be a first-time buyer?
No. There's no first-time-buyer requirement — just the area, income, and occupancy rules.
Can I use a USDA loan for a rental or second home?
No — primary residence only. No investment properties, vacation homes, or working farms.
Is there a loan limit?
No set maximum, but your income cap and DTI effectively limit how much you can borrow.
Do I have to be a U.S. citizen?
U.S. citizens and legal permanent residents can qualify, subject to standard documentation.
Income & qualifying
What are the 2026 income limits?
~$119,850 (1–4 people) / $158,250 (5–8) baseline, higher in costly CA counties. Set at 115% of area median income. See Eligibility.
Does all my household income count?
Every adult's income counts, not just borrowers — but it's adjusted income, with deductions ($480/child and more) that can bring you under the cap.
What credit score do I need?
No USDA minimum; lenders want ~620, and 640 unlocks streamlined GUS underwriting. Lower can work with manual underwriting.
What's GUS?
The Guaranteed Underwriting System — USDA's automated tool. A 640+ score typically routes you through it for a faster decision.
What's the DTI limit?
Roughly 29% housing / 41% total, flexible with strong credit, reserves, or stable income. See Requirements.
Can I qualify if I'm self-employed?
Yes, with a stable income history (typically two years). W-2 earners qualify immediately.
Costs, fees & rates
Is it really $0 down?
Yes — 100% financing. You'll need closing costs, but sellers can contribute up to 6% and some costs can be financed.
How much is the guarantee fee?
1% upfront (usually financed) + 0.35% annual (paid monthly). Both below FHA.
Are USDA rates lower?
Typically below conventional and often comparable to VA, since the loan is government-backed. See Rates.
Can I remove the annual fee?
It stays for the life of the loan; refinancing to conventional at 20% equity can end it (trading away zero-down benefits).
Is there a prepayment penalty?
No. Pay extra or pay off early with no fee.
Can I use gift or seller funds?
Yes — gift funds and seller credits (up to 6%) can cover closing costs.
Process & property
How long does it take to close?
About 30–45 days. There's an extra USDA review step after lender approval that can add a little time. See Process.
Only 30-year loans?
USDA guaranteed loans are 30-year fixed only — no 15-year or adjustable-rate options.
Does the home need an appraisal?
Yes — a USDA appraisal checks value and condition against minimum property standards.
Can USDA cover repairs or upgrades?
Yes — eligible repairs, accessibility improvements, and some energy upgrades can be included.
Guaranteed vs Direct — which is this?
We originate the Guaranteed program (private lenders, up to 115% AMI). Direct is USDA-funded for very-low income.
What if I don't fit USDA?
We'll pivot you to FHA or another program that fits — same day.
Reviewed by the licensing team at Save Financial, a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766) founded in 2009 and serving all 58 counties from offices in Newport Beach and Marina del Rey.