USDA loans require no down payment and have lower interest rates than most conventional loans. They include a 1% upfront guarantee fee and an annual fee of 0.35% (paid monthly).

Eligibility is based on income (usually capped at 115% of the area median) and property location (must be in a USDA-designated rural area, which includes many suburbs and small towns).

USDA loans are issued by approved private lenders but guaranteed by the USDA's Rural Development program.