6 days ago
45
Updated
2023-03-01T20:10:41Z
Our experts answer readers' home-buying questions and write unbiased product reviews (here's how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.
USDA loans are a great option for borrowers who don't have the money for a down payment.
These mortgages are backed by the United States Department of Agriculture. They're available to low-to-moderate income borrowers who live in eligible rural and suburban areas.
USDA loans require no down payment and often have better interest rates and less stringent credit requirements, too.
The Best USDA Loan Lenders of 2023
- Fairway Independent Mortgage Corporation USDA Mortgage: Best overall
- Flagstar Bank USDA Mortgage: Best for first-time homebuyers
- Freedom USDA Mortgage: Best for a streamline refinance
- Guild USDA Mortgage: Best for non-traditional credit
- Movement USDA Mortgage: Best for low credit scores
- Truist USDA Mortgage: Best online experience
- CMG Financial: Best for a down payment
Keep reading for the details on the best mortgage lenders that offer USDA loans.
The Best USDA Loan Lenders
Fairway Independent Mortgage Corporation USDA Mortgage
Fairway Independent Mortgage Corporation USDA Mortgage
Fairway Independent Mortgage Corporation USDA Mortgage
Pros & Cons
Offers USDA mortgages in all 50 US states
Accepts alternative credit data
Easy-to-navigate website
Option to close on your mortgage digitally instead of in person
Doesn't show mortgage rates online
You may need a credit score as high as 640 or 660 if other parts of your financial profile aren't strong
Highlights
- Offers mortgages in all 50 US states and Washington, DC
- Branches in every US state except Alaska and West Virginia
- Apply with alternative credit data (such as proof that you pay bills on time) if you have a poor or no credit score
Additional Reading
Flagstar Bank USDA Mortgage
Flagstar Bank USDA Mortgage
Flagstar Bank USDA Mortgage
Pros & Cons
USDA mortgages are available in all 50 US states
See personalized mortgage rates online
Doesn't accept alternative credit data
Highlights
- Offers USDA mortgages in all 50 US states and Washington, DC
- Doesn't accept alternative forms of credit, such as utility bills, instead of a credit score — Flagstar will complete a hard credit pull
Additional Reading
Freedom USDA Mortgage
Pros & Cons
Offers USDA mortgages in all 50 US states
Good BBB rating
Doesn't show mortgage rates on its website
Doesn't accept alternative forms of credit
Highlights
- Offers mortgages in all 50 US states, Puerto Rico, and US Virgin Islands
- Physical branches in AZ, CA, CT, FL, GA, MD, MA, NC, NH, NJ, NY, PA, RI, TX, VA, and WA
- Apply at a branch, or fill out a form online and wait for a representative to call you so you can apply over the phone; you cannot apply online
- Does not accept alternative forms of credit, like proof that you pay bills on time — you must show a credit score
Additional Reading
Guild USDA Mortgage
Pros & Cons
Minimum 600 credit score for USDA mortgages
Accepts alternative credit data
Hybrid closing option
Unavailable to residents of New Jersey or New York
Highlights
- Offers mortgages in every US state except New York and New Jersey
- Branches in 32 US states
- Show alternative credit data, such as utility bills, to help your application if you have a poor credit score
Additional Reading
Movement USDA Mortgage
Pros & Cons
Offers USDA mortgages in all 50 states
Minimum 580 credit score for a USDA mortgage
No personalized mortgage rates shown on the website
Doesn't accept alternative credit data for USDA mortgages
Highlights
- Offers mortgage rates in all 50 US states and Washington, DC
- You can apply with alternative credit data for an FHA mortgage, but not a USDA mortgage
Additional Reading
Truist USDA Mortgage
Pros & Cons
Borrowers with no credit score may still be able to qualify
A+ rating from BBB
Can't see customized rates online
Not available to residents of Alaska, Arizona, or Hawaii
Highlights
- In 2019, BB&T and SunTrust merged to form Truist
- Doesn’t lend in Arizona, Alaska, or Hawaii
Additional Reading
On CMG Financial - USDA Mortgage's website
CMG Financial
Pros & Cons
Offers USDA mortgages in all 50 US states
Accepts alternative credit data along with a credit score
Doesn't show interest rates on its website
Alternative credit data alone can't help you qualify for a mortgage
Highlights
- Offers home loans in all 50 US states and Washington, DC
- CMG Financial accepts alternative credit data (like proof that you pay bills on time) to improve your application, but you cannot use alternative data to completely replace a credit score on your application — you must have a credit score
Additional Reading
Methodology: How We Chose the Best USDA Lenders for 2023
To choose the top USDA loan lenders, we looked at three main factors:
- Affordability/credit score. USDA loans are known for being an affordable option, with no down payment for qualifying borrowers. They also usually have more lenient credit score requirements than conventional mortgages. We chose lenders that accept low credit scores or are flexible about credit scores if other parts of your financial profile are strong. Some of the companies on our list also accept alternative forms of credit in place of a credit score.
- Customer satisfaction. If the lender appeared in the J.D. Power 2022 Mortgage Origination Satisfaction Study, we looked at its ranking. If it wasn't in the survey, we read online customer reviews.
- Ethics. Almost all of our top picks received an A or A+ from the Better Business Bureau, which measures companies' trustworthiness.
See our full methodology for evaluating mortgage lenders »
USDA Loan Frequently Asked Questions
A USDA loan is a mortgage backed by the United States Department of Agriculture. It's for borrowers with low-to-moderate income levels who buy homes in rural or suburban areas.
With a USDA loan, you can buy a home with no down payment. You must get a fixed-rate mortgage; adjustable rates aren't an option.
All of the lenders on this list are strong USDA loan lenders. Your exact match will partly rely on your credit score. For example, if your credit score is under 620, you'll want to go with Freedom Mortgage, Guild Mortgage, or Movement Mortgage.
Look for other factors that are important to you in a lender. For instance, to close on your USDA loan digitally instead of in person, you'll like Fairway Independent Mortgage Co. or Guild Mortgage.
USDA loans are for people with low-to-moderate income levels, but your exact income limit depends on your state and county. See the USDA's guide to income limits by county.
A USDA loan is often worth it for people who qualify. USDA loans charge lower interest rates than conforming mortgages, and they have more lax credit score and down payment requirements. This means it's both easier and more affordable to choose a USDA loan.
These loans are limited to homes in rural areas, though. You may not feel it's worth it to live in a small town just to get a USDA loan. You might prefer an FHA loan, which is also for people with low credit scores but more widely available.
Best USDA Lender Overall
Fairway Independent Mortgage Corporation USDA Mortgage
The pros of Fairway Independent:
- Available in all 50 US states
- A+ rating from the BBB and earned the No. 4 spot in J.D. Power's 2022 Mortgage Origination Satisfaction Study.
- Accepts alternative forms of credit
- Easy-to-navigate website
- Hybrid closing option
The cons of Fairway Independent:
- Rates aren't posted online
- Get a USDA mortgage with a credit score as low as 620 if other parts of your financial profile are great; otherwise, you may need a score of 640 or 660
Fairway Independent Mortgage Corporation Review
Best USDA Lender for First-Time Homebuyers
Flagstar Bank USDA Mortgage
The pros of Flagstar Bank:
- Available in all 50 US states
- Enter personal information to see customized rates online
- A- rating from the BBB
The cons of Flagstar Bank:
- Doesn't accept alternative forms of credit
Best USDA Lender for a Streamline Refinance
Freedom USDA Mortgage
The pros of Freedom Mortgage:
- Available in all 50 US states
- A+ score from the BBB
The cons of Freedom Mortgage:
- Ranks low on the J.D. Power 2022 Mortgage Origination Satisfaction Survey
- No way to see mortgage rates online
- Doesn't accept alternative forms of credit
Best USDA Lender for Non-Traditional Credit
Guild USDA Mortgage
The pros of Guild Mortgage:
- Get a USDA mortgage with a credit score as low as 600
- Accepts alternative forms of credit
- Hybrid closing option
- A score from the BBB
The cons of Guild Mortgage:
- Unavailable to residents of New Jersey or New York
Best USDA Lender for Low Credit Scores
Movement USDA Mortgage
The pros of Movement Mortgage:
- Available in all 50 states
- Qualify for a USDA mortgage with a credit score as low as 580
- A+ rating from the BBB
The cons of Movement Mortgage:
- No customized mortgage rates shown on the website
- Doesn't accept alternative forms of credit for USDA loans (but it does for FHA loans)
Best USDA Lender for a Good Online Experience
Truist USDA Mortgage
The pros of Truist:
- Accepts alternative forms of credit if you do not have a credit score (you must show a credit score if you have one, though)
- A+ rating from the BBB
The cons of Truist:
- There are sample interest rates on its website, but you can't see customized rates online
- Not available to residents of Alaska, Arizona, or Hawaii
Best USDA Lender for a Down Payment
CMG Financial
The pros of CMG Financial:
- Available in all 50 US states
- Although alternative credit data (such as proof of paying bills on time) cannot fully replace a credit score, it can be shown to prove you are actively improving your finances
- The BBB gives it an A- rating
The cons of CMG Financial:
- No way to see interest rates on its website
- Alternative credit alone cannot help you get a mortgage
Other USDA Loan Lenders We Considered
USDA loans aren't as common as FHA or VA loans, and not as many lenders offer them. There are a few lenders that we considered but didn't make the cut for our list of best USDA loan lenders:
- Caliber Home Loans: To get in touch with someone at Caliber Home Loans (either through messaging or on the phone), you have to create an account with the lender first.
- Carrington Mortgage: You'll need a credit score closer to 700 to get a USDA loan with Carrington.
- PNC Bank: You must have at least 3% down for a USDA loan.
- Veterans United: Veterans United does offer USDA loans, but the lender's main focus and strength is VA loans.
Best USDA loan lenders
-
Fairway Independent Mortgage Corporation
-
Flagstar Bank Mortgage
-
Freedom Mortgage
-
Guild Mortgage
-
Movement Mortgage
-
Truist Home Mortgage
-
CMG Financial
Editors' Rating
4.75/5
Editors' Rating
4.25/5
Editors' Rating
3.5/5
Editors' Rating
4.5/5
Editors' Rating
4.88/5
Editors' Rating
4.13/5
Editors' Rating
4.75/5
Are These Lenders Trustworthy?
To compare each USDA lender's trustworthiness, we've examined grades from the Better Business Bureau.
The BBB grades businesses based on responses to customer complaints, transparency about business practices, and honesty in advertising. Here are the scores for our top picks:
All the lenders on our list have an A- or higher from the BBB.
Guild Mortgage has an A because the BBB is acknowledging a public controversy between the mortgage lender and the government. The BBB says CMG Financial has an A- rating because it hasn't resolved 102 customer complaints.
A couple of these lenders do have recent public controversies.
The Consumer Financial Protection Bureau fined Freedom Mortgage $1.75 million in 2020, claiming that loan officers purposely entered incorrect sex, race, and ethnicity information on borrowers' home loan applications. The order states that from 2014 to 2017, if a borrower didn't fill in the race/ethnicity section of an application, officers marked it as non-Hispanic white.
In 2020, Guild Mortgage paid the United States $24.9 million when it was accused of approving FHA mortgages for people who didn't qualify, resulting in loan defaults.
Who qualifies for a USDA loan?
A lender looks at two factors to determine whether you qualify for a USDA loan: your property and your financial profile.
Property eligibility
You may qualify for a USDA loan if you're buying a home in a rural or suburban area. The population restrictions are 20,000 for some counties and 35,000 for others.
If you already know the address of the home you want to buy, enter the information into the USDA Property Eligibility Site. You'll need to select which type of USDA loan you're interested in, so you'll choose "Single Family Housing Guaranteed" if you want a guaranteed USDA loan.
Borrower eligibility
Here's what you need to qualify for a USDA loan:
- You must be a US citizen or permanent resident.
- Your household should be at a low-to-moderate income level. The maximum income requirement depends on where you live, and you can see your county's income limit here.
- You'll need to provide proof of stable income for at least the last two years.
- Many lenders require a good credit history, although some of the companies on our list accept lower credit scores and alternative forms of credit, such as proof of paying rent on time.
- Your monthly mortgage payments should not exceed 29% of your monthly income. This number includes your loan principal, interest, insurance, taxes, and homeowner's association dues.
- Other debt payments should come to 41% or less of your monthly income. However, you could qualify with a higher debt-to-income ratio if your credit score is very good or excellent.
There is no maximum borrowing limit. A lender will approve you to borrow a certain amount based on your financial profile.
Mortgage and Refinance Rates by State
Check the latest rates in your state at the links below.
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming
Laura Grace Tarpley, CEPF
Personal Finance Reviews Editor
Laura Grace Tarpley (she/her) is a personal finance reviews editor at Insider. She edits articles about mortgage rates, refinance rates, lenders, bank accounts, wealth building, and borrowing and savings tips for Personal Finance Insider. She was a writer and editor for Insider's "The Road to Home" series, which won a Silver award from the National Associate of Real Estate Editors. She is also a Certified Educator in Personal Finance (CEPF). She has written about personal finance for over six years. Before joining the Insider team, she was a freelance finance writer for companies like SoFi and The Penny Hoarder, as well as an editor at FluentU. You can reach Laura Grace at ltarpley@insider.com. Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services »
Read more Read less
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
**Enrollment required.
Thanks for signing up!
Access your favorite topics in a personalized feed while you're on the go.
More...
