The USDA No-Down-Payment Home Loan Most Texas & Arizona Buyers Miss

For eligible borrowers, yes — a USDA guaranteed loan offers 100% financing, so there is no minimum down payment. You are still responsible for closing costs, though some can be covered by seller concessions or rolled in using appraised-value room. There is a one-time 1.00% upfront guarantee fee (which can be financed) and a 0.35% annual fee. All loans are subject to credit approval, and not all applicants will qualify.

USDA eligibility is by exact address, and the maps change. Roughly 4.5% of Texas and 3.9% of Arizona land is ineligible — mostly the urban cores of Dallas, Fort Worth, Austin, Houston, San Antonio, Phoenix, and Tucson — while much of the surrounding rural and exurban area qualifies. Because 'portions of' a town can be split between eligible and ineligible zones, always verify your specific address on the official USDA eligibility map, and we'll confirm it with you.

USDA caps household income at 115% of the area median income (AMI) for your county, counting the income of all adult household members — even non-borrowers. The 2025 base limit is $119,850 for a 1–4 person household and $158,250 for a 5–8 person household, with higher figures in metros like Phoenix and some Austin-adjacent counties. These numbers update each fiscal year, so we check your exact county limit for you rather than relying on a static figure.

USDA sets no hard minimum credit score, but most lenders look for 640 or higher to earn an automated 'Accept' from USDA's Guaranteed Underwriting System (GUS), which streamlines approval. Below 640, a loan can still be manually underwritten with stronger documentation and compensating factors. If your score is close but not there yet, we'll tell you honestly what to work on.

No — this is the biggest myth. USDA-eligible areas include plenty of growing suburbs and exurban towns, not just farmland. In Texas that means places like Waxahachie, Terrell, and much of Parker and Ellis counties; in Arizona, towns like Casa Grande, Prescott Valley, and Sierra Vista. The property just has to sit inside a USDA-eligible boundary and be your primary residence. Verify your exact address on the USDA map.

USDA loans have typical mortgage closing costs (appraisal, title, lender fees, prepaids). While the down payment is zero, closing costs are separate — but you have options: seller concessions, lender credits, and, when the home appraises above the purchase price, financing costs up to the appraised value. The 1.00% upfront guarantee fee can also be financed into the loan rather than paid at closing.

USDA charges a 1.00% upfront guarantee fee (financeable) plus a 0.35% annual fee paid monthly across the life of the loan. Compared with FHA — which carries a 1.75% upfront premium and annual mortgage insurance that often lasts the life of the loan — USDA's fees are typically lower month to month. Fees are set annually by USDA and are subject to change.

A USDA loan generally closes on a similar timeline to other mortgages — often around 30–45 days. When the file earns a GUS 'Accept,' processing can move quickly. We handle the coordination and keep your file moving, though appraisal turn times and documentation speed affect every loan.

No. USDA Home Loan Pros and the Cook Brothers Mortgage Team at Cornerstone First Mortgage, LLC (NMLS #173855) are not affiliated with, endorsed by, or sponsored by the U.S. Department of Agriculture or any government agency. We are licensed mortgage loan originators — Tanner Cook (NMLS #2090424) and Zac Cook (NMLS #2111496) — who help borrowers apply for the USDA guaranteed loan program. You can verify our licensing on the NMLS Consumer Access website.