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USDA Loan Limits: What's the Most You Can Borrow?

Not all USDA loans have loan limits, though some do. Learn how USDA loan limits work and how they might affect you.

May 2, 2022
May 2, 2022
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USDA loans are great mortgages if you can get them. Zero down payment, low mortgage insurance premiums, and typically lower interest rates than other loans.

Another perk? There are no USDA loan limits if you get a USDA Single-Family Guaranteed Loan, which represents the vast majority of all USDA loans.

What's in this Article?

USDA Direct Loan Limits
What is the USDA loan limit in my area?
Alternatives to USDA Single-Family Direct Loans
USDA loan limit FAQs
Check your USDA loan eligibility

USDA Direct Loan limits

Most U.S. Department of Agriculture (USDA) loans do not come with loan limits. Only Direct Loans do, but these make up just a tiny fraction of all USDA loans. Most likely, you won’t have any stated limits on your USDA loan.

For the USDA Direct Loan program, 2022 loan limits are:

  • $336,500 in most of the country
  • Up to $970,800 in high-cost areas

Fortunately, USDA offers two loan programs to help low- and moderate-income Americans buy homes in rural areas.

Whether you encounter USDA loan limits depends on which USDA loan program you’re using.

  • USDA Direct Loans: The federal government issues these loans directly to very low- and low-income homebuyers, defined as those who make less than 50-80% of the area median income. The USDA loan limits apply, and you submit your application to the USDA, rather than a mortgage lender.
  • USDA Guaranteed Loans: Private banks, credit unions, and mortgage lenders offer these loans for low- to moderate-income homebuyers with incomes up to 115% of the area median. The loans are insured by the USDA. There are no loan limits, and you apply through a lender, not through the USDA itself. 

Both loan programs exist to make home buying easier in qualifying rural and suburban areas, as defined by the USDA. Ninety-seven percent of the U.S.’s land mass falls into a qualifying area, so it’s worth asking your lender whether you qualify for a zero-down USDA mortgage.

The USDA started setting loan limits for direct loan borrowers in 2022. However, USDA loan limits do not apply to guaranteed loans. That means there’s no cap on the size of loan a lender can approve to have it meet USDA guidelines.

But your lender will determine how much you can borrow based on your credit and ability to make your monthly mortgage payments.

What is the loan limit in my area?

In most U.S. housing markets, the USDA loan limit for Single-Family Direct Loans is $336,500 in 2022. But if you’re buying in an area with higher housing prices, loan limits may be higher.

For example, in Wake County, N.C., the loan limit is $336,500. In Clark County, Wash., a homebuyer could borrow up to $478,400. A USDA Direct Loan for a home in Santa Cruz County, Cali. could be as high as $970,800 -- the highest limit in the US.

You can look up your county here to find out what your USDA loan limit might be as of March 9, 2022.

I want to buy a home with USDA, but the house I want is above the USDA loan limit. What are my options?

If your home’s purchase price exceeds the USDA loan limit in your area, you may need to:

Get a USDA Guaranteed Loan instead: Many private lenders offer USDA Guaranteed Loans which, unlike USDA Direct Loans, are not subject to loan limits. Lenders will set your loan size based on your ability to repay the loan as measured by your debt-to-income ratio (DTI), credit history, and income.

Consider a non-USDA government loan program: VA loans have no loan limits and, like USDA, require no down payment for qualified borrowers. But only veterans, active-duty military servicemembers, and some surviving spouses qualify.

Almost anyone can apply for an FHA loan. You may even qualify with a 3.5% down payment if your credit score is 580 or higher. Like VA and USDA loans, FHA loan interest rates tend to be lower than on conventional loans because they are government-insured. And while there are FHA loan limits, they are significantly higher than the USDA Direct loan limits.

Alternatives to USDA Single-Family Direct Loans

USDA Single-Family Direct Loans finance modest single-family homes, and only borrowers with very low or low incomes can qualify.

If you can afford the payments on a larger home that costs more than your area’s loan limit — or if you have enough cash to make a large down payment — the USDA Direct Loan program may not be for you.

Instead, look for a USDA-approved private lender and ask about getting pre-qualified for a USDA Guaranteed Loan. This loan type no loan limits.

There are strict USDA loan income limits as well, so if your household income is above the limit (you can check your eligibility here), you might want to consider an FHA or conventional loan.

Both of these options have higher loan limits and more flexibility in the types of properties you can buy.

USDA loan limits FAQs

Is there a maximum loan amount for USDA?

Yes, but only if you’re getting a USDA Direct Loan. In most U.S. counties you can borrow up to $336,500 in 2022 with a USDA Direct Loan. Limits are higher in more expensive housing markets.

USDA Guaranteed Loans do not have loan limits. Instead, the private lenders who offer these loans (with backing from the USDA) will determine your loan size based on your personal finances.

Do I make too much for a USDA loan?

You might. The USDA bases its income eligibility guidelines on household size and location. To see where you stand, find your housing market on this map:

- For USDA Direct Loan eligibility, look for the “low income” line beneath your household size. If your income exceeds that number, you may not be eligible for a USDA Direct Loan.
- For USDA Guaranteed Loans, look for the “moderate income” line for your household size. If your income is significantly higher, you’ll likely need an FHA loan or a conventional loan instead.

However, USDA lenders look at your adjusted household income, which means income after deductions for minor children, childcare expenses, and some other allowances. So if your income is only a few thousand dollars above the limit, it’s worth talking to a lender about whether you qualify.

What is the downside to a USDA loan?

USDA home loans are only available in qualifying rural and suburban areas, and you must meet the income eligibility requirements to qualify.

You can only use a USDA mortgage loan to buy a single-family home that will be your primary residence — no vacation homes or investment properties allowed, not even multifamily properties in which you’ll live in one of the units.

USDA loans also require you to pay mortgage insurance for the life of the loan, and there are loan limits if you take out a USDA Direct Loan.

Is a USDA loan good?

USDA loans can be great options for first-time homebuyers because of the 0% down payment requirement and flexible qualifying criteria.
And although you’ll have to pay a mortgage insurance premium on the loan, the rate is lower than you’d find on an FHA loan. You can also refinance to a conventional loan when you have 20% equity in the home to avoid the mortgage insurance cost at that point. 

Check your USDA loan eligibility

USDA loan limits curb the borrowing power of Direct Loan homebuyers, but loan sizes tend to be high enough to finance safe, comfortable homes for borrowers who are borrowing in qualifying areas.

Fortunately, USDA Guaranteed Loan borrowers don’t have to worry about loan limits at all, making this 0% down payment mortgage all the more attractive.

*USDA Guaranteed Rural Housing loans subject to USDA-specific requirements and applicable state income and property limits. Fairway is not affiliated with any government agencies. These materials are not from USDA or RD and were not approved by USDA or RD or any other government agency.

Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.

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