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KNB Capital · Loan Programs
USDA
Rural Home Loan
Zero down payment. No PMI. Competitive rates backed by the U.S. government — for buyers in eligible rural and suburban areas of California, Texas, and Idaho.
Check Your Eligibility Start ApplicationThe Basics
What Is A USDA Loan?
A USDA loan — officially the Section 502 Guaranteed Loan Program — is a 100% government-backed mortgage for buyers in USDA-designated rural and suburban areas. It requires zero down payment, carries no private mortgage insurance, and offers some of the lowest rates available for eligible borrowers. It is not just for farms or remote areas — most of California outside of dense urban cores qualifies.
Unlike VA loans which are earned through military service, USDA loans are income-based and location-based. If the property is in an eligible area and your household income is within the limits for your county, this may be the most affordable path to homeownership available to you.
What It Takes To Qualify
USDA Loan Requirements
Property Location
The home must be in a USDA-designated rural or suburban area. Areas with populations under 35,000 typically qualify. In California, this includes large portions of the Central Valley, Inland Empire, and communities throughout CA, TX, and ID. We verify eligibility by address before you get too far into the process.
Income Limits
Household income cannot exceed 115% of the area median income for your county. For 2026, the baseline limit is $119,850 for a household of 1–4 and $158,250 for 5–8. High-cost California counties have higher limits. Note: total household income counts — not just the borrower's.
Credit & Debt
Most lenders require a 620+ FICO score. Debt-to-income ratios should be under 41%, though 44% is possible with strong compensating factors. USDA prioritizes stable employment and consistent income history over perfect credit.
Primary Residence Only
USDA loans are for owner-occupied primary residences only — no investment properties or vacation homes. Single-family homes, eligible condos, and manufactured homes on permanent foundations all qualify.
Common Questions
What You Need To Know
Does USDA Really Have No PMI?
Correct — USDA loans do not have private mortgage insurance (PMI). Instead, there is a one-time upfront guarantee fee (1% of the loan amount, typically rolled into the loan) and a small annual fee (0.35% of the loan balance). Even with these fees, USDA is often cheaper per month than FHA, which charges higher mortgage insurance premiums.
How Do I Know If The Property I Want Is Eligible?
The USDA maintains an eligibility map at eligibility.sc.egov.usda.gov where you can enter any property address. As your broker, we check this for every USDA scenario before we go further. Many buyers are surprised to find that suburban communities, small towns, and areas just outside major cities qualify — it's one of the most underused loan programs in California.
Can USDA Be Combined With Down Payment Assistance?
Yes. The CalHFA USDA Program allows USDA first mortgages to be paired with the CalHFA MyHome Assistance Program for closing cost help. Since USDA already covers the down payment, the DPA layer can be used to cover closing costs — potentially getting you into a home with very little or no out of pocket at closing.
How Is USDA Different From FHA Or VA?
All three offer low or no down payment options, but they serve different borrowers. VA is exclusively for veterans and has no income limits. FHA is available anywhere with no location restriction, but requires 3.5% down and higher mortgage insurance. USDA requires zero down, has the lowest mortgage insurance costs of the three, but is limited to eligible areas and borrowers within income limits. For qualified buyers in eligible areas, USDA is often the best deal on the market.
Zero Down. No PMI.
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