What Is a USDA Loan?

A USDA loan is a type of mortgage that is backed by the United States Department of Agriculture (USDA). USDA rural development loans in Florida are designed to promote homeownership in the less densely populated regions in the state. USDA loans can be a great deal for buyers, offering low or even no down payment requirements and highly competitive interest rates. Borrowers can even take out a USDA construction loan in Florida if they would rather build a home than purchase an existing property. 

However, to be eligible for one of these loans, you must meet some specific criteria. For example, you must conform to income limits, which can vary depending on where the property is located. In addition, the property itself has to meet USDA standards, meaning it is in an approved rural area and the property is in good condition. 

If you’re thinking about getting a USDA home loan in Florida, here is how to make that happen: You apply through a lender approved by the USDA. They will take a look at your income, credit history, and a few other things to see if you qualify. If you make the cut, the USDA jumps in to guarantee part of the loan, easing the lender’s worries and letting them offer better terms to borrowers.

All in all, USDA rural development loans in Florida open up doors for prospective buyers to own a home in rural areas without facing major financial roadblocks. 

USDA Loan Requirements in Florida

If you’re curious about USDA loan requirements in Florida, it is good to know what’s expected. Right off the bat, there are some basic criteria you must meet:

  • Citizenship: You must be a U.S. citizen or permanent resident with a steady income and a willingness to pay back the loan.
  • Income limits: Borrowers need to stay within the income limits set by the USDA, which vary based on how big their household is and where they are looking to buy.
  • Location: The property needs to be in a rural area that is approved by the USDA. You can take a look at the USDA eligibility map to find areas where you can buy a home using a USDA loan. 
  • Lender’s rules: On top of the general rules, lenders might have extra requirements like a minimum credit score or proof that borrowers have enough cash to cover closing costs. These rules make sure you are financially ready to handle the loan and help ease the lender’s worries.

If you are thinking about getting a USDA loan in Florida, it is smart to chat with a lender approved by the USDA so they can walk you through all the ins and outs and figure out if you are a good fit for the loan.

Pros and Cons of USDA Loans

When it comes to deciding which loan is best for you, there are a few pros and cons of USDA loans to consider. 


Here’s an overview of the benefits and considerations of USDA loans:

  • Zero down payment: USDA loans allow borrowers to buy a house with no money down. This accessibility facilitates homeownership, particularly for those who are looking to buy a house with low income, all while still enabling them to allocate funds towards other home-related expenses.
  • Competitive interest rates: Backed by the government, USDA loans offer lenders reduced risk, translating into comparatively low interest rates for borrowers.
  • Streamline USDA refinance: The USDA has a streamline refinance program that allows for existing USDA loans to be refinanced to a lower rate (if available) without any income, appraisal, or credit requirements. Some restrictions do apply but for the most part it is a pretty easy process to lower your rate as long as you aren’t looking for any cash-out.
  • Flexible credit requirements: USDA loans typically have more forgiving credit score criteria compared to conventional loans, accommodating borrowers with less-than-perfect credit histories. At Griffin Funding, we can work with borrowers who have FICO scores as low as 600. 
  • No PMI: Unlike conventional loans, USDA loans do not mandate private mortgage insurance, potentially resulting in lower monthly mortgage payments for borrowers.
  • Absence of prepayment penalties: USDA loans do not impose penalties on borrowers who choose to pay off their mortgage ahead of schedule, affording them greater flexibility in managing their loan repayment.


Some considerations of USDA loans are as follows:

  • Property location restrictions: Properties eligible for USDA loans must be situated in USDA-designated rural areas, which may limit options for buyers preferring urban or suburban settings. Additionally, homes must meet specific size, safety, and location criteria within eligible areas.
  • Guarantee fees: USDA loans allow borrowers to skip out on PMI, but all borrowers must still pay an upfront and annual guarantee fee in order to support the USDA rural development program. Expect to pay 1% upfront and .35% annually. These fees can be rolled into the loan but should be carefully compared to conventional loans without any guarantee fees. The breakdown point may not be worth the tradeoff of zero down payment in some cases.
  • Income limits: In order to qualify for a USDA loan, you must meet income limits that are specific to the region where you’re looking to buy. If your income exceeds the local loan limit, then you’ll either have to look in another area or explore alternative financing options. 
  • Funding constraints: USDA loans are subject to the availability of funds, and there may be instances where resources are depleted, leading to potential delays in loan approval.

Despite these considerations, USDA loans remain a valuable option for buyers seeking affordable homeownership in rural areas of Florida.

How to Qualify for a USDA Loan in Florida

To qualify for a USDA construction loan in Florida, there are a few things to keep in mind. As mentioned earlier, it is crucial to fully understand all the requirements set by your lender to make sure you are eligible. Here are some key things to consider if you’re thinking about applying for a USDA loan in Florida:

  • Must be a U.S. citizen.
  • A minimum FICO score of 600.
  • Meet the minimum debt-to-income ratio.
  • Only primary residences are eligible.
  • The property in question must be located in a designated rural area, according to the USDA. 
  • An applicant’s adjusted income should not surpass 115% of the median income for the area where the desired home is located, depending on family size.

Apply for a USDA Loan in Florida

If you’re ready to take the next step in your home purchasing process and apply for a USDA home loan in Florida, then reach out to Griffin Funding today. You can also download the Griffin Gold app to review and compare mortgage options, manage your finances, privately search for homes, and get personalized help from our team of mortgage professionals. 

Griffin Funding offers expertise in navigating USDA loan requirements and assists borrowers in understanding income and location guidelines. Partner with Griffin Funding to access the benefits of USDA loans in Florida and receive support through every step of the mortgage process. Contact us to learn more or fill out an online application today!