Free educational tools for Texas home buyers · Identify federal, state, and local homeownership assistance programs you may qualify for. Educational information only - not a loan offer or guarantee of eligibility.
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FederalUSDA Loan

USDA Rural Development Loan

100% financing for low-to-moderate income buyers in eligible rural and suburban Texas areas. No down payment required.

Assistance0% down

Overview

The USDA Guaranteed Rural Housing loan offers 100% financing for low-to-moderate income buyers purchasing in eligible rural and suburban Texas areas. Many outer-ring suburbs of major metros still qualify.

How it works

  • USDA guarantees the loan, allowing lenders to offer 0% down.
  • Annual guarantee fee is lower than FHA mortgage insurance.
  • Income capped at ~115% of area median income; property must be in a USDA-eligible area.

Application process

  1. 1
    Take a HUD-approved homebuyer education course
    Required by nearly every Texas assistance program. Free or low-cost online. The certificate is good for two years.
  2. 2
    Get pre-qualified with a participating lender
    Not every lender is approved for USDA Rural Development Loan. Ask directly: "Are you an approved lender for USDA Rural Development Loan?" before submitting documents.
  3. 3
    Confirm income, price, and area limits
    Limits are set by household size and county. Have recent pay stubs, W-2s, and tax returns ready so the lender can verify in writing.
  4. 4
    Submit a complete loan + program application
    Your lender packages the underlying mortgage application and the program reservation together. Funding is first-come, first-served.
  5. 5
    Lock your funds and proceed to closing
    Once reserved, the assistance is held for a fixed window (typically 60-90 days). Coordinate the inspection, appraisal, and closing inside that window.

Eligibility at a glance

  • ✓Household income under USDA limits for the county and family size
  • ✓Property in a USDA-eligible area (use the USDA eligibility map)
  • ✓Typical credit score 640+
  • ✓Primary residence only

Frequently asked questions

Does USDA Rural Development Loan require me to be a first-time buyer?▾

Some programs are first-time-buyer only (no ownership in the prior 3 years); others serve repeat buyers within income limits. Confirm the rule with your approved lender before applying.

Can I combine this with other Texas programs?▾

In most cases, yes - one statewide program plus a local city/county program and an MCC tax credit is a common stack. State programs (TDHCA and TSAHC) usually cannot be combined with each other on the same loan.

Is this a grant I never repay, or a second loan?▾

It depends on the program and the option you choose. Many Texas programs offer a grant (never repaid) or a forgivable second lien (forgiven after 5-10 years of owner occupancy). Selling or moving early may trigger partial repayment.

How long does the application take?▾

From lender pre-qualification to closing, typical timelines are 30-60 days when documents are complete. Program reservation must stay active through closing.

Will using this program raise my interest rate?▾

Some assistance programs use a slightly higher base rate to fund the assistance. Compare the total cost with and without the program over your expected holding period before deciding.

Official source

USDA Rural Development. Program details, income limits, and funding availability change. Always confirm current rules at the official program site before applying.

https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program/tx ↗