Purchase Tips · April 26, 2025
USDA Loans: Buying a Home With Zero Down in Eligible Areas
USDA loans offer zero down payment for homes in eligible rural and suburban areas. Many buyers are surprised to discover how many neighborhoods qualify.
USDA loans offer better terms than most buyers realize — and qualify far more areas than most buyers expect.
What USDA Offers
Zero down payment (100% financing), competitive fixed rates, lower annual mortgage insurance than FHA (0.35% vs. 0.55%+), and up to 6% seller concessions for closing costs.
Eligible Areas: Much More Than Remote Rural
The USDA defines eligible areas broadly — communities with populations up to 35,000+ may qualify. Many suburban neighborhoods within commuting distance of major cities are eligible.
In Illinois: most of downstate plus outer suburban Chicago areas. In Indiana: large portions including suburban areas of Indianapolis and Fort Wayne. In Florida: areas outside major urban cores including much of the Panhandle and Central Florida.
Income Limits
All household income counts. In many IL and IN counties a family of 4 can earn $110,000-$130,000 and still qualify.
USDA vs. FHA on a $280,000 Purchase
USDA: $0 down, $81.67/month MI. FHA: $9,800 down, $137.50/month MI. USDA wins on both counts for eligible borrowers in eligible areas.
HMS loan officers verify eligibility for every property you are considering. Call 309-222-8286.