Core Insights - USDA loans provide financing for residential properties in rural areas with no down payment required, targeting low- and moderate-income households [1][10] - The USDA offers two main loan programs: Guaranteed Loans and Direct Home Loans, each catering to different income levels and needs [2][4] Loan Types - **USDA Guaranteed Loan**: Available through approved private lenders, these loans require no down payment and are aimed at households earning up to 115% of the local median income [3] - **USDA Direct Loan**: Designed for very low- and low-income borrowers, these loans provide payment assistance and are issued directly by the USDA [4][5] Loan Requirements - Borrowers must meet specific criteria, including income limits, primary residence usage, property location in eligible areas, and a monthly mortgage payment not exceeding 29% of gross income [6][7][12] - No minimum credit score is required by the USDA, but private lenders may impose their own requirements [6] Fees and Costs - USDA loans involve a guarantee fee, which includes a one-time fee at closing and an ongoing annual fee, similar to mortgage insurance [8][14] Advantages and Disadvantages - **Pros**: No down payment required, lower interest rates compared to conventional loans, and potential payment assistance for low-income buyers [11][14] - **Cons**: Strict qualification criteria, no adjustable-rate mortgage options, and limitations on eligible properties [13][14][15]