USDA Home Loans in Texas
If you're a Texas buyer with a modest income, two questions decide whether a USDA loan is on the table: does your household income fit under the limit for your county, and does the house sit in an area USDA has mapped as eligible? This site explains how USDA checks both, in plain language, and shows you what happens next.
Quick answer: A Texas USDA loan is a home loan backed by the U.S. Department of Agriculture under the Single Family Housing Guaranteed Loan Program. It's for households within USDA's income limit buying a primary home in an area USDA treats as rural, which can include small towns and some areas near larger cities. The program does not require a down payment for eligible buyers. All loans subject to credit and property approval.
USDA loan calculator
Estimate a monthly payment on a USDA Guaranteed loan: principal and interest, USDA's upfront and annual fees, taxes, insurance and HOA dues, using your own numbers. Nothing you enter is stored or sent.
What is a USDA loan in Texas?
A USDA loan in Texas is a Section 502 Guaranteed home loan: a private lender makes the loan, and USDA Rural Development guarantees it.
The program's full name is the Single Family Housing Guaranteed Loan Program. Its rules live in USDA's technical handbook, HB-1-3555, and in federal regulation 7 CFR 3555. USDA's loan guarantee is what lets lenders offer the loan to buyers who don't have a large down payment saved. It protects the lender, not you, and you still have to qualify on credit and repayment ability like any other mortgage.
There's a second USDA program people mix up with this one: the Section 502 Direct loan, which USDA makes itself to lower-income households. This site is about the Guaranteed program, which is the one Danny Nassar, NMLS 220172, originates through Canopy Mortgage, LLC. For a fuller explanation, read what a USDA loan is and how it works.
Who qualifies for a USDA loan in Texas?
You may qualify if your household income is within the limit for your county, you'll live in the home, and your credit and repayment ability meet USDA and lender standards.
USDA looks at you, the buyer, through a short list of checks before anything else. The table sums them up, and our full guide to USDA loan requirements in Texas walks through each one with the handbook reference.
| Check | What USDA looks at |
|---|---|
| Household income | Adjusted annual income of everyone in the household, compared with the limit for your county and household size |
| Occupancy | The home must be your primary residence |
| Credit | A history showing you handle obligations; reviewed through USDA's automated system or manually |
| Repayment ability | Your housing payment and total debts compared with your stable income |
| Status | U.S. citizen, U.S. non-citizen national or qualified alien; legal capacity to sign; not barred from federal programs |
| Other credit | You can't otherwise get a traditional conventional loan as USDA defines it |
You don't have to be a first-time buyer. USDA also allows, in some situations, buyers who already own a home. Our USDA guide for first-time home buyers in Texas covers both cases.
Which Texas homes and areas are eligible?
The property must sit in an area USDA designates as rural, be your primary home, and be safe, sound and mainly residential.
"Rural" in USDA's sense is broader than most people expect. Many small towns and some subdivisions on the edges of Texas metros fall inside eligible boundaries, while some small towns don't. The only reliable answer is the exact address, checked on USDA's property eligibility map. Here's how to use the USDA eligibility map for a Texas address, including what each result means.
There's no maximum price set by the guaranteed program. What you can borrow is limited by your income limit, your repayment ability and the appraised value. Existing homes, new construction, certain manufactured homes and eligible condos can work; homes built mainly to produce income, like working farms or ranches, can't.
How do Texas USDA income limits work?
USDA caps adjusted household income by county and household size, and it counts every adult in the home, not only the people on the loan.
Most Texas counties share a statewide figure, while some metro areas and counties have their own higher limit. Limits change when USDA publishes a new table, so check the current figure for your county on USDA's tool. We explain how USDA income limits work in Texas and show you how to look up your county on USDA's official tool.
What can a USDA loan be used for?
USDA Guaranteed loans can buy an existing home, build a new one, buy and repair a home, or refinance an existing USDA loan.
First home in Texas
How first-time buyers use the program, and what to check before touring homes.
Build a new home
Single-close construction-to-permanent financing with a qualified builder.
Manufactured homes
Which new and existing manufactured homes meet USDA's rules.
Buy and repair
Repair escrows and rehabilitation with purchase, in one loan.
Refinance a USDA loan
Options for Texas homeowners who already have a USDA loan.
Streamlined refinance
Streamlined and Streamlined-Assist, compared side by side.
Does a USDA loan require a down payment?
The program does not require a down payment for eligible buyers, but you'll still have closing costs, prepaid items and a guarantee fee to plan for.
USDA charges an upfront guarantee fee, which can be financed into the loan, and an annual fee that's built into your monthly payment. USDA sets both each fiscal year. Reasonable and customary closing costs are an eligible loan purpose, and sellers may contribute toward them within USDA's limits. Danny will go over the current fee notice and your estimated costs with you, in writing, once you apply. All loans subject to credit and property approval.
How does the USDA loan process work?
You work with a lender from start to closing, and USDA reviews the lender's decision before the loan closes.
- Talk it through. Share where you want to buy, who lives with you and your income sources.
- Check the address and the income limit. Danny helps you read USDA's map and income tool for your situation.
- Apply and send documents. Income, assets and identity documents for the people on the loan, plus income for other adults in the home.
- Find a home and sign a contract. Then the appraisal and any inspections.
- Underwriting, then USDA review. The lender underwrites; USDA issues a Conditional Commitment if it agrees.
- Close. USDA then issues its Loan Note Guarantee to the lender.
Each step, with who does what, is on our USDA loan process page. Timing depends on your file, the property and USDA's own workload at the time; ask Danny Nassar, NMLS 220172, what to expect for your situation.
USDA compared with FHA and conventional loans
USDA is limited by location and income; FHA and conventional loans aren't, but they work differently on down payment and mortgage insurance.
If your address or income doesn't fit USDA, your purchase can still go ahead with a different program. Compare the features in USDA vs FHA loans and USDA vs conventional loans. Danny writes conventional, USDA, FHA and VA loans, so one conversation can sort out which program fits.
Why work with Danny Nassar, NMLS 220172?
Danny, a Texas-licensed residential mortgage loan originator with Canopy Mortgage, LLC, can spot location, income and property issues early, before you're under contract. Read more about working with your Texas USDA lender.
Danny Nassar, NMLS 220172, has been in mortgage lending since 2004 and works with buyers across Texas from Canopy Mortgage's El Paso branch, by phone and email, in English, Spanish or Arabic. You can verify his license and Canopy's on NMLS Consumer Access. Read what to look for in a USDA lender in Texas or learn more about Danny.
Frequently asked questions
Can I get a USDA loan near a big Texas city?
Sometimes, yes. USDA decides eligibility by mapped area, not by city name, and some areas near Texas metros are eligible. Check the exact street address on USDA's property eligibility map; see our eligibility map guide.
Is a USDA loan only for farms?
No. It's a home loan for a primary residence. In fact, properties used mainly for farming or other income-producing activity aren't eligible. A garden that brings in a small amount of extra income is fine under the handbook.
Do I have to be a first-time home buyer?
No. First-time and repeat buyers can both use the program. If you already own a home, USDA has specific rules about keeping it; see our first-time buyer guide.
What credit score do I need?
USDA's handbook doesn't print one minimum score for every file. USDA's automated system weighs your credit, and lenders, including Canopy, may set their own requirements. Danny can tell you Canopy's current requirements. More on our requirements page.
Does Danny work outside El Paso?
Yes. Danny Nassar, NMLS 220172, works with buyers anywhere in Texas by phone and email from the El Paso branch. He is also licensed in New Mexico, Nevada and California.
Talk with Danny about your Texas USDA loan
Tell Danny the county you're buying in and who lives in your household. He'll walk you through the USDA rules that apply to you and the next steps.
All loans subject to credit and property approval.