USDA Loans in Florida: Eligibility & Requirements [+ Pros & Cons]

Reviewed by: Jason Caruso

There’s a lot to consider when it comes to financing a home — from managing your credit score and debt-to-income ratio, to looming expenses and exploring different mortgage options.

In Florida, the possibilities are even more extensive. Prospective homebuyers have their choice of lively urban centers, remote rural communities and everything in between. Because it’s our job to make sure you have the information you need to to find the best fit for your financial situation and homeownership goals, let’s take a closer look at USDA loans in Florida.

What Is a USDA Loan?

USDA loans, also known as Rural Development Loans, have been offered by the U.S. Department of Agriculture since 1949. They were established to stimulate economic growth in less densely populated communities, primarily rural and suburban areas.

Homebuyers are often attracted to USDA loans because they offer significant cost savings compared to other options. These loans provide 100% financing, require no down payment and feature low private mortgage insurance rates. Both types of USDA loans — single-family direct loans and the single-family guaranteed loans — have paved the way for homeownership for millions of people.

The single-family direct loan is intended for very low and low-income borrowers, while single-family guarantees are for those with low and moderate income. Eligibility criteria vary by state, but USDA loans typically offer less stringent requirements compared to many other loan programs.

FHA vs. USDA Loan

Federal Housing Administration (FHA) loans and USDA loans are both government-backed mortgage options designed to relieve the financial burden of the homebuying process. However, they each serve different purposes and have distinct eligibility criteria that are important to understand.

Both types of loans are processed through individual lenders but are backed by the federal government.

	FHA loan	USDA loan
Intended borrower	Moderate and low-income prospective homebuyers	Prospective homebuyers in rural and suburban areas
Down Payment	At least 3.5% down	No requirement
Location	No requirement	Must be in an eligible area
Credit Score	500-580 (Put less money down with a higher credit score)	640+ recommended
Interest Rates	Often higher than USDA and conventional mortgages	Often lower than FHA and conventional mortgages
Closing Costs	Buyer is responsible for closing costs. Specifics vary by lender but some fees can be covered by the seller or lender.	Buyer is responsible for closing costs. Specifics vary by lender but some fees can be covered by the seller or lender.

What Are the Income Limits for USDA Loans in FL?

Since the USDA home loan program was designed for low- to moderate-income buyers, there are strict eligibility rules. The income limits for USDA loans in Florida vary from county to county and are based on the total income of all members of the household over the age of 18.

In general, Florida households with up to four members can have a max gross annual income of $110,650. The threshold is higher for households with five or more members, totaling $146,050 in some counties. County-specific information is available on the USDA website.

Applying for USDA Loans in Florida

These are the general steps you will need to follow to apply for a USDA loan in Florida. It’s important to note, however, that specific requirements may vary based on lender requirements and individual circumstances.

Determine eligibility by using the self-assessment tool provided on the USDA website to check income and location guidelines.
Get pre-qualified by a licensed mortgage broker by providing information about your income, credit, assets and debts.
Complete required applications, including Form RD 410-4 (Uniform Residential Loan Application), Form RD 3550-1 (Authorization to Release Information) and Form RD 3550-4 (Employment and Asset Certification).
Get a property appraisal required by the USDA to ensure that the property in question abides by regulations.
Wait for loan approval and closing information from your lender, which will require an in-person meeting to sign paperwork.

FAQs

Can I still qualify for a USDA loan if I don’t live in a rural area?

USDA loans are historically intended for use in rural areas, but it’s worth using the self-assessment tool provided online to check the eligibility of specific locations.

Are USDA loans only for first-time home buyers?

USDA loans are not only for first-time home buyers, but they are popular for that demographic because of zero down payments and low interest rates. It’s more important that the borrower meets geographic and income requirements.

Can I get a USDA loan for a property that will not be my primary residence?

No, a borrower must reside in the property they are financing with a USDA loan.

Does a USDA loan require a certain down payment?

One of the most appealing aspects of a USDA loan is that there are no down payment requirements.

Can I buy a multi-family home with a USDA loan?

No, only single-family homes or single-unit condominiums are eligible for purchase with a USDA loan.

Have questions about how to ensure that you’re considering all of your home-buying options? The team at Blue Water Mortgage is ready to help every step of the way. Start by downloading our mortgage FAQs eBook for answers you’ll need to get started.

Roger Odoardi

Roger is an owner and licensed Loan Officer at Blue Water Mortgage. He graduated from the University of New Hampshire’s Whittemore School of Business and has been a leader in the mortgage industry for over 20 years. Roger has personally originated over 2500 residential loans and is considered to be in the top 1% of NH Loan Officers by leading national lender United Wholesale Mortgage.