To be eligible for a USDA home loan, certain requirements must be met:
- Homeowners must have had their mortgage denied by a traditional lender
- Applicants must be U.S. citizens
- Applicants must have a dependable income
- Applicants must have a reasonable credit score
- For direct loans from the USDA, applicants must meet income restrictions
Direct loans are typically given for small homes of less than 2,000 square feet. Other requirements include meeting debt and spending limits. For instance, debt to income ratios (how much monthly debt compared to income) must not exceed 41% and housing payments must not exceed 29% of monthly expenses.