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2 to 3 days
Competitive with the national average
35-day average
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Reviewed
Reviewed
Updated: May 31, 2024, 1:33pm
USDA loans make getting a mortgage more affordable and accessible for home buyers in eligible rural and suburban areas. Backed by the U.S. Department of Agriculture, USDA loans have been around since 1991.
USDA loans are a good deal for eligible borrowers because they require no down payment, and the minimum credit scores are often lower than conventional mortgages. Interest rates for USDA loans are also typically lower than conventional loans. Forbes Advisor selected lenders that offer competitive interest rates, low annual percentage rates (APRs), discounts or a combination of all these features.
Why you can trust Forbes Advisor
Our editors are committed to bringing you unbiased ratings and information. Our editorial content is not influenced by advertisers. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally. You can read more about our editorial guidelines and the mortgages methodology for the ratings below.
2 to 3 days
Competitive with the national average
35-day average
580
Lower than the national average
35-day average
We picked Flagstar Bank Mortgage because of its flexible customer support options. Customer service hours—including for email, phone and online chat—are Monday through Friday, 7:30 a.m. to 9 p.m. ET and Saturday 8:30 a.m. to 6 p.m ET. Plus, you can apply online or visit branch locations in Indiana, Michigan, Ohio and Wisconsin.
How to apply
Flagstar Bank offers several ways for customers to get a mortgage. They can apply online or visit a lender in person. They can also visit a branch location in Indiana, Michigan, Ohio and Wisconsin. Customer support hours, including for email, phone and online chat, are Monday through Friday, 7:30 a.m. to 9 p.m. ET and Saturday 8:30 a.m. to 6 p.m ET. Preapproval takes less than three days.
Speed
Flagstar’s average closing time is 35 days, which is shorter than the industry average. In some cases, closing can occur in as few as 11 days.
Eligibility
Loan types
Flagstar Bank offers conventional and jumbo mortgages in fixed- and adjustable-rate structures, plus FHA, VA and USDA loans. It also offers construction and renovation loans as well as specialty loans, which include loans for multiple properties and loans in high-cost areas. Home equity loans are available in limited areas. You can enter your ZIP code on the Flagstar website to find out if you qualify for a home equity loan.
Loan Type | Yes | No |
---|---|---|
Conventional
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✓
|
|
FHA
|
✓
|
|
VA
|
✓
|
|
USDA
|
✓
|
|
Jumbo
|
✓
|
|
ARM
|
✓
|
|
Home equity loan
|
Limited
|
|
Specialty
|
✓- Multiple Property Loans, High-Balance Loans and Jumbo Adjustable Rate
|
620
Lower than the national average
45-day average
We picked PNC Bank Mortgage for its fully digital preapproval application, where borrowers can receive approval in a matter of minutes. Once you apply for a mortgage, you can follow the workflow online, upload supporting documents and even invite real estate agents into the process to monitor the final approval progress.
How to apply
Borrowers can apply online or in person at a bank location in the following states and Washington D.C.: Alabama, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin.
Customer support by phone is available Monday through Thursday from 8 a.m. to 9 p.m. ET, Friday from 8 a.m. to 5 p.m. ET and Saturday from 9 a.m. to 2 p.m. ET. Preapproval can take as little as 30 minutes or up to one day.
Speed
The average closing time is 45 days, which is about the industry average. In some cases, the closing can be as short as 30 days.
Eligibility
Loan types
PNC Bank offers a wide selection of home loans, including conventional, FHA, VA, USDA and jumbo loans, home equity loans and specialty loans for medical professionals.
Loan Type | Yes | No |
---|---|---|
Conventional
|
✓
|
|
FHA
|
✓
|
|
VA
|
✓
|
|
USDA
|
✓
|
|
Jumbo
|
✓
|
|
ARM
|
✓
|
|
Home equity loan
|
✓
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|
Specialty
|
✓ – Community (No PMI) Loan, Medical Professional Loan
|
Min. credit score
540
Mortgage rates
N/A
Days to close
17-day closing guarantee to qualified borrowers
540
N/A
17-day closing guarantee to qualified borrowers
We picked Guild Mortgage because it’s a great option for USDA borrowers with lower credit scores. It requires a minimum credit score of 540 for USDA loans—about 80 points less than what the average USDA mortgage lender requires.
How to apply
Guild Mortgage offers both branch locations and online access to borrowers who want to apply for a USDA loan. Its paperless application process allows borrowers to send paperwork electronically as well as apply and keep track of the application process online.
Phone support is limited to weekdays from 6:00 a.m. to 5:00 p.m. PT; the lender is closed on weekends.
Speed
USDA loan preapproval times may vary compared to Guild Mortgage’s other offerings. However, you can expect a turnaround in less than a week.
Eligibility
Loan types
Guild Mortgage’s product line includes fixed and adjustable-rate conventional mortgages, jumbo mortgages and government-backed loans such as FHA, USDA and VA loans. It also offers FHA renovation loans, new construction loans and home equity options.
Loan Type | Yes | No |
---|---|---|
Conventional
|
✓
|
|
FHA
|
✓
|
|
VA
|
✓
|
|
USDA
|
✓
|
|
Jumbo
|
✓
|
|
ARM
|
✓
|
|
Home equity loan
|
✓
|
|
Specialty
|
✓- StrongStart Program; MH Advantage Program
|
620
Lower than the national average
27 to 30 days
We picked Truist Mortgage specifically for borrowers on the East Coast and in the southern United States. Most of its branches are located in the eastern and southern portions of the U.S., giving borrowers in those regions the additional benefit of in-person support. However, Truist isn’t limited to those regions; it offers mortgages in 47 states (Alaska, Arizona and Hawaii are excluded) and Washington, D.C.
How to apply
Borrowers can apply online or in person at one of more than 2,500 branch locations. Applicants can get a same-day mortgage preapproval.
Speed
Closing on a mortgage can take up to 30 days.
Eligibility
Loan types
Truist offers fixed and adjustable-rate mortgages, VA loans, FHA loans, conventional and jumbo mortgages as well as doctor loans and construction-to-permanent loans.
Loan Type | Yes | No |
---|---|---|
Conventional
|
✓
|
|
FHA
|
✓
|
|
VA
|
✓
|
|
USDA
|
✓
|
|
Jumbo
|
✓
|
|
ARM
|
✓
|
|
Home equity loan
|
✓
|
|
Specialty
|
✓- Doctor loans, construction-to-permanent loans
|
Company | Company - Logo | Forbes Advisor Rating | Forbes Advisor Rating | Minimum Credit Score for USDA loans | Mortgage rates | Days to Close | Learn More CTA text | Learn more CTA below text | Learn More |
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Flagstar Bank | 5.0 | Not specified | Lower than the national average | 35-day average | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |||
PNC | 5.0 | 620 | Lower than the national average | Average closing time is 45 days. | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |||
Guild Mortgage | 4.0 | 540 | N/A | 17-day average | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |||
Truist | 4.0 | 620 | Lower than the national average | 27 to 30 days | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com |
Flagstar Bank is one of the nation’s largest mortgage loan originators and mortgage servicers. While branch locations can only be found in 29 states, USDA loans are available to borrowers online nationwide.
Available in All 50 States
Online application process available; in-person branches also are available at 87 retail locations in 29 states.
How To Apply
Flagstar Bank offers several ways for customers to get a mortgage. They can apply online or visit a lender in person.
Customer support hours, including for email, phone and online chat, are Monday–Friday, 7:30 a.m. to 8 p.m. ET and Saturday 7:30 a.m. to 4 p.m ET.
Speed
Preapproval time is less than three days, while its average closing time is 35 days, which is shorter than the industry average. In some cases, closing can occur in as few as 11 days.
Credit Requirements
Flagstar Bank has mortgage products with minimum credit score requirements of 680, however it doesn’t specify a minimum credit score for its USDA loans.
The lender considers alternative credit data, such as rent and utility payments, when reviewing mortgage applications.
PNC Bank is one of the largest financial services institutions in the U.S. with approximately 2,300 branches across the country.
Available in All 50 States
PNC is available online in all 50 states, but it also has branches for borrowers more comfortable with a brick-and-mortar experience in the following states: Alabama, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin.
How To Apply
Borrowers can apply online or in person at a bank location. Customer support by phone is available Monday through Thursday from 8 a.m. to 9 p.m. ET, Friday from 8 a.m. to 5 p.m. ET and Saturday from 9 a.m. to 2 p.m. ET.
Speed
Preapproval takes between 20 to 30 minutes. The average closing time is 45 days, which is about the industry average. In some cases, closing can be as short as 30 days.
Credit Requirements
Borrowers must have a minimum credit score of 620, but aim for a score of at least 640 if you’re seeking a USDA loan.
Guild Mortgage is a nationally recognized independent mortgage lender that offers USDA loans with “better-than-average” interest rates and a low credit score requirement.
Available in Most States
Guild Mortgage has over 200 branch locations in 43 states.
How To Apply
Guild Mortgage offers both branch locations and online access to borrowers who want to apply for a mortgage. Their paperless application process allows borrowers to send paperwork electronically as well as apply and keep track of the application process online.
Phone support is very limited, operating only Monday–Friday from 6:00 a.m. to 5:00 p.m. PT; the lender is closed on weekends.
Speed
Preapproval times are not as fast as other lenders, with a one- to three-day turnaround on preapproval letters. However, Guild Mortgage offers a 17-day closing guarantee, which can be attractive for borrowers who need to close quickly.
Credit Requirements
Guild Mortgage requires a minimum credit score of 540 for USDA loans—one of the lowest requirements we found among lenders researched.
Truist offers in-person and online mortgage services, including USDA loans, to some of the fastest-growing markets in the U.S.
Available in 47 States
Truist is available in 47 states plus Washington, D.C.; the exceptions being Alaska, Arizona and Hawaii. In addition, the bank has more than 2,000 branch locations, however most of them are located in the eastern and southern portions of the U.S.
You can find Truist branches in Washington, D.C. and the following 17 states: Alabama, Arkansas, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, North Carolina, New Jersey, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia.
How To Apply
Borrowers can apply online or in person if branch locations are available. Customer support is available by phone Monday–Friday, 8 a.m. to 8 p.m. ET and Saturday from 8 a.m. to 5 p.m. ET. The bank is closed on Sundays.
Speed
Borrowers can count on getting preapproved within 24 hours.
Credit Requirements
Truist’s minimum credit score requirement for USDA loans is 620.
USDA loans are designed for borrowers who might not qualify for a conventional mortgage but still meet USDA eligibility requirements. These requirements include buying a home in a designated area, meeting income limits and certifying that the home you’re buying will be your primary residence.
Before you begin comparing lenders, make sure you meet the requirements.
Here are some tips to consider once you’re ready to compare USDA lenders:
After you apply for a USDA loan, you’ll receive a loan estimate. By applying with several lenders you can compare these estimates and even use them to negotiate lower interest rates or certain fees, such as application or underwriting fees.
Comparison shopping often leads to lower interest rates, so be sure to collect as much information as you can. You can use a loan estimate from one lender to potentially negotiate a lower rate with another lender.
Forbes Advisor reviewed 12 mortgage lenders that do business both online and in person throughout the United States. The lenders we reviewed represent some of the largest mortgage lenders by volume, which include banks, credit unions and online lenders.
Our scoring methodology included capturing more than 10 data points, which covered interest rates, lender fees, discounts, accessibility and borrower requirements.
The best lenders for USDA borrowers excelled in areas that are historically important for this group including low- to average-credit score requirements, low lender fees and low interest rates.
The following is the weighting assigned to each category:
Specific characteristics taken into consideration within each category include APR, average interest rate, origination fees, minimum credit score requirements, discounts and customer service availability.
We also offered bonus points up to 5% of the score when a lender considers alternative credit data.
To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Mortgage Lenders.
USDA loans are mortgages backed by the U.S. Department of Agriculture to encourage homeownership in designated rural areas. Interest rates on these loans tend to be lower than those offered on conventional loans, which helps make them more affordable.
A USDA loan allows home buyers with qualifying incomes to buy, build or repair a home in eligible rural areas.
Some of the best USDA loan benefits include:
USDA loans can make it easier to secure affordable housing, although borrowers pay an upfront guarantee fee of 1% and an annual guarantee of 0.35% for the life of the loan. The lender will collect this expense through the monthly loan payment.
It’s also possible to refinance non-USDA home loans into this program.
If you want to apply for a USDA loan, follow these steps:
There are a few basic requirements that you must meet to get approved for a USDA loan.
The USDA doesn’t set credit score requirements for its home loans. However, USDA-approved mortgage lenders often require a minimum credit score of 640. The USDA also allows lenders to use alternative credit metrics for applicants with a thin credit history.
It’s possible to qualify for USDA home loans with a credit score lower than 640, although the underwriting process is more extensive. For instance, the manual underwriting process may take your existing rent or mortgage payments into consideration. Lenders may also request a letter of explanation regarding derogatory marks on your credit report.
Like with any other type of mortgage, it’s important to take the time to find the right lender for you. To do so, compare your options from as many lenders that offer USDA loans as possible. If you know someone who has worked with a USDA lender, they might be able to provide a recommendation and more in-depth information.
As you shop around, consider interest rates, repayment terms, any fees charged by the lender, and eligibility requirements. This will help you find a good deal as well as identify a lender that suits your needs.
Two USDA loan programs are available for single-family home buyers and may not require a down payment or cash reserves. Income limits, repayment term, and the institution behind the loan are key differences.
The USDA Section 502 Guaranteed Loan Program is the most common loan program with higher limits. It’s intended for borrowers with a low or moderate income not exceeding 115% of the area’s median household income.
This loan program only offers a 30-year repayment term and is available from approved USDA lenders.
The Section 502 Direct Loan program provides subsidized financing to very-low- and low-income households that may not qualify for other home loan programs.
Low-income borrowers are eligible for a payback period of 33 years while very-low-income households are eligible for a 38-year term.
Effective June 1, 2023, the maximum interest rate is 4%, although it can be as low as 1% with payment assistance. Aspiring homeowners must apply directly through USDA Rural Development instead of a private lender.
A USDA loan is worth it for home buyers with a limited income and cash reserves since the program doesn’t typically require any down payment. This loan type may also offer lower rates than conventional loans.
The most substantial drawbacks for most borrowers are the upfront and annual guarantee fees. Additionally, borrowers can be subject to narrow income limits to qualify.
The USDA doesn’t have a specific credit score requirement. However, you’ll typically need a credit score of at least 640 to qualify with most lenders.
Not necessarily. For low-income borrowers who live in rural areas, it might be easier to qualify for a USDA-loan compared to getting a conventional loan. However, there could be difficulty in finding a home in an eligible area.
As with any type of loan, there are several reasons why someone could get denied for a USDA mortgage. Some common reasons that applications are rejected include:
To be eligible for USDA financing, a home must adhere to certain requirements. Some of these include:
If a home doesn’t meet these eligibility criteria, you won’t be able to get USDA financing for it.
Newlyweds may consider a USDA streamlined assist refinance loan to add new borrowers that occupy the residence after originating the original loan.
Marriage doesn’t immediately impact the eligibility for an existing loan, as the underwriting only included the annual income for eligible adult occupants at the time of application. However, the applicant must provide the earnings from any domestic partner, significant other or fiance currently living in the household.
Buyers are required to pay the USDA loan closing costs, although the seller or an interested party can contribute up to 6% of the sales price.
You must move in within 60 days after closing and live in the home for at least 12 months before you can rent it out.
Natalie toggles between news stories and enterprise reporting to bring timely personal finance topics to readers. Her mission is to help inform people of all financial backgrounds about events that may affect their financial futures. Her work has appeared in numerous publications such as CNBC, Bankrate, Buzzfeed, ABC Action News, The Chicago Tribune, The Associated Press and the Tampa Bay Times. She’s appeared on various podcasts and news shows to discuss personal finance topics, including Nasdaq’s Trade Talks.
Having lived in several states, owning primary residences and investment properties, Josh Patoka uses his experience using mortgages and HELOCs to help first-time home buyers and home owners find the best home loan for their financial goals. His work has been featured on several financial and media websites.