USDA Loans in Texas -Zero Down for Eligible Rural & Suburban Buyers
Most people hear "USDA loan" and think it's only for farmland. Not true. Many Texas suburbs and smaller communities within driving distance of Austin, Dallas, Houston, and San Antonio qualify for USDA financing — including communities in Hays, Caldwell, Bastrop, and Williamson counties. If you're buying outside a major city center and income-eligible, a USDA loan can get you into a home with zero down payment and no monthly mortgage insurance requirement. Russell Stout at Texas Mortgage Consultants charges no lender fees and will tell you honestly whether USDA is the right fit — or point you toward something better.
USDA LOANS
- No Down Payment
- No Need to be a First Time Homebuyer
- Guaranteed by the US Department of Agriculture
What Is a USDA Loan?
A USDA loan is a zero-down mortgage backed by the U.S. Department of Agriculture. Despite the name, it has nothing to do with farming. It was designed to help moderate-income buyers purchase homes in eligible rural and suburban areas — which in Texas includes a surprising number of communities most people don't think of as "rural."
USDA loans come in two forms:
USDA Guaranteed Loan — The most common. Originated by approved lenders like Texas Mortgage Consultants and backed by the USDA. Available to moderate-income buyers.
USDA Direct Loan — Issued directly by the USDA for very low-income buyers. Less common.
This page focuses on the USDA Guaranteed Loan, which is what most buyers use.
USDA Loan Requirements in Texas (2026)
| Requirement | USDA Standard |
|---|---|
| Down payment | $0 |
| Min. credit score | 640 preferred (lower possible) |
| Income limit | ~$110,650 for 1–4 person household (varies by county) |
| Property location | Must be in USDA-eligible area |
| Property type | Primary residence only |
| Mortgage insurance | 1% upfront guarantee fee + 0.35% annual fee |
Income limits vary by county and household size. We'll verify your eligibility based on your specific county and household before you go further.
Does My Texas Location Qualify for USDA?
This is the most common question — and the answer is often yes, even for buyers near Austin.
USDA-eligible areas near Austin (examples):
- Parts of Bastrop County (Bastrop, Smithville, Elgin)
- Parts of Caldwell County (Luling, Lockhart)
- Parts of Hays County (some areas outside Kyle/Buda city limits)
- Parts of Lee County and Fayette County
- Many communities in East and Central Texas
Not eligible: Properties within Austin city limits, Round Rock, Cedar Park, Georgetown, Pflugerville, Kyle, and Buda (city limits) are generally not USDA-eligible due to population density.
The best way to check: give us the address and we'll look it up in the USDA eligibility map. It takes 2 minutes.
USDA Mortgage Insurance — What You'll Pay
USDA loans have two mortgage insurance costs, but both are significantly lower than FHA:
Upfront Guarantee Fee: 1.0% of the loan amount, rolled into the loan at closing
On a $250,000 loan: $2,500 added to your balance
Annual Fee: 0.35% of the outstanding balance per year, paid monthly
On a $250,000 loan: approximately $73/month
Compare that to FHA's 1.75% upfront + 0.55% annually — USDA is considerably cheaper for eligible buyers.
USDA vs. Other Zero-Down Options
| USDA | VA | FHA (3.5% down) | |
|---|---|---|---|
| Down payment | $0 | $0 | 3.5% |
| Who qualifies | Income/location eligible | Veterans only | Most buyers |
| Mortgage insurance | Low annual fee (0.35%) | No PMI | MIP for life of loan |
| Property location | Rural/suburban only | Anywhere | Anywhere |
| Credit score | 640+ preferred | 580–620+ | 580+ |
| Income limits | Yes | No | No |
Frequently Asked Questions
Do I have to buy a farm for a USDA loan?
No. USDA loans are for regular homes in eligible rural and suburban areas. The property just can't be inside a large city's limits. Many suburbs and small towns qualify.
How do I know if my property is USDA-eligible?
The USDA maintains an eligibility map based on census data. Send us the address and we'll check it for you in minutes.
What are the income limits for a USDA loan in Texas?
Limits vary by county and household size. For most Central Texas counties, the limit for a 1–4 person household is approximately $110,650 in 2026. This goes up for larger households. We'll check your specific county.
Can I use a USDA loan if I've owned a home before?
Yes — USDA is not limited to first-time homebuyers. As long as you're income-eligible, the property qualifies, and you'll be using it as your primary residence, you can use a USDA loan.
Is there a USDA loan limit?
There's no hard loan limit with USDA Guaranteed loans, but you must qualify based on income, and the property value must meet the appraisal. Most USDA purchases in Texas fall in the $150,000–$400,000 range.
How long does USDA pre-approval take?
USDA approval typically takes a bit longer than conventional or FHA — plan for 30–45 days total from application to close. Pre-approval can happen within 24–48 hours; the USDA itself adds time to the process.
Not Sure If USDA Works for Your Situation?
Send us the address and your household income and we'll tell you in minutes whether USDA is an option — or whether FHA, VA, or conventional makes more sense. No pressure, no commitment.
Call or text: (512) 423-4663 
Learn more: texasmortgageconsultants.com 
Start your application: Apply Online
Russell Stout | Texas Mortgage Consultants, PLLC NMLS# 220896 | Company NMLS# 1843758 | Texas SML License# 220896 8805 Lemens Spice Trail, Austin, TX 78750 | Equal Housing Lender Texas Mortgage Consultants, PLLC is not acting on behalf of or at the direction of the U.S. Department of Agriculture or the federal government.
