TEXAS USDA
HOME LOANS

The USDA mortgage loan in Texas is a  fantastic program offers low-interest rates, no down payment requirements, and flexible credit guidelines, making homeownership in Texas more accessible than ever. Perfect for rural and suburban areas, a Texas USDA loan helps you secure a beautiful home while keeping more money in your pocket. 

A USDA loan was created in the early 1990s to make home ownership more affordable for low-income rural families.  Due to the fact that more than 97% of Texas is classified as rural, USDA loans are available to a large number of borrowers. The USDA loan might be the right choice for you if you live in a rural area of Texas and you meet the income requirements. 

USDA loans are a great because they they typically have lower rates and up to 100% financing. 

Another advantage of USDA loans is they require no downpayment and there are no  prepayment penalties, but their rates are fixed. In addition to private mortgage insurance (PMI), USDA mortgage loans also require it. 

There are no ARM products available for USDA rural housing loans. 

Still have questions?  Call to speak to one of our Texas USDA loan experts today! 

So what is a USDA loan?  Simply stated it is a Rural Housing Development loan also known as  Rural development loans and also referred to as Section 502 loans. The government created USDA loans to make it easier for low-income families in rural areas to become homeowners. This type of loan is available for many Texas borrowers because as of 2024, 97% Texas is classified as rural area.

A Texas USDA loan may be the best mortgage option for you if you qualify and your property qualifies. Similar to Texas FHA loans and Texas VA home loans, there are a number of advantages to USDA financing, including low interest rates and up to 100% financing. Besides no prepayment penalties, USDA loans can also be structured without a down payment and have no prepayment penalties.  That’s right, 100% financing! 

ARM mortgages are not available for USDA loans in Texas.  USDA loans do require private mortgage insurance, which your loan officer can better explain. 

Still have questions? Our friendly USDA loan specialists can help answer any of your questions about USDA Loans.  To learn more about USDA loans in Texas, you can visit USDA.gov to check eligibility by address or zip code.  Call today to speak with one of our USDA loan specialist to see if going USDA is right for you. 

*2024 minimum credit score is 600 FICO (or higher). Borrowers with higher credit scores receive streamlined processing.  Applicants with below 600 FICO scores may still qualify but will require more stringent underwriting.

Advantages of USDA loans:

1. No Down Payment: USDA loans offer the significant benefit of requiring no down payment, making it easier to purchase a home without a large upfront expense.

2. Low Interest Rates: These loans often feature competitive interest rates, which can reduce your monthly mortgage payments and save you money over the life of the loan.

3. Flexible Credit Requirements: USDA loans are more forgiving of less-than-perfect credit compared to other loan types, often requiring a credit score of 640 or higher.

4. Affordable Mortgage Insurance: The mortgage insurance costs for USDA loans are generally lower than those for FHA or conventional loans, making them more budget-friendly.

5. High Income Limits: USDA loans are available to borrowers with incomes up to 115% of the median income for the area, making them accessible to a broad range of homebuyers.

6. No Prepayment Penalties: You can pay off your USDA loan early without facing prepayment penalties, allowing you to save on interest if you choose to pay off your loan faster.

7. 100% Financing: With no down payment required, USDA loans cover the entire cost of the home, which helps in preserving your savings for other needs or emergencies.

8. Assumable Loans: USDA loans can be assumed by qualified buyers, which can be a selling point if you decide to sell your home in the future.

9. Rural and Suburban Areas: The loan is designed to promote homeownership in rural and suburban areas, often leading to less competition and potentially more affordable home prices.

10. Streamlined Refinancing: If you already have a USDA loan, you may be eligible for the USDA Streamlined Assist program, which simplifies the refinancing process and can lead to better loan terms.

These benefits make Texas USDA loans a compelling option for many homebuyers looking to purchase in eligible areas. Lone Star Financing was voted as the best 2024 USDA lender in Texas.