What Is a USDA Loan?

A USDA loan, also known as a Rural Development Loan, is a mortgage program managed by the United States Department of Agriculture (USDA) that is aimed at promoting homeownership in rural communities and less densely populated regions. Since USDA rural development loans in Idaho are backed by the government, they come with appealing terms like minimal to no down payment requirements and competitive interest rates.

To qualify for a USDA loan, borrowers must meet specific criteria, including income limits that vary depending on the property’s location. Additionally, the property must meet USDA eligibility requirements, such as being located in a designated rural area as determined by the USDA.

If you’re thinking about applying for a USDA rural development loan in Idaho, the process involves going through a USDA-approved lender. These lenders will assess your eligibility based on factors like income, credit history, and more. 

Overall, USDA loans provide individuals and families with the opportunity to realize homeownership in rural areas without encountering major financial obstacles. 

USDA Loan Requirements in Idaho

For those curious about diving deeper into USDA loans in Idaho requirements, it’s crucial to grasp the key essentials, including:

  • Citizenship: Applicants should hold U.S. citizenship or permanent residency, showcasing a steady income and a dedication to repaying the loan.
  • Income limits: Potential borrowers must fall within the income thresholds set by the USDA, which vary depending on household size and location.
  • Location prerequisites: Properties must be situated in eligible rural areas as defined by the USDA.
  • Lender-specific criteria: While general guidelines are in place, lenders might enforce additional conditions like minimum credit scores, debt-to-income ratios (DTI), and proof of funds

Prospective borrowers are advised to consult with a USDA-approved lender to understand all requirements thoroughly and determine their eligibility for a USDA loan in Idaho.

Pros and Cons of USDA Loans

Whether you want to purchase a home with a USDA loan or build one with a USDA construction loan in Idaho, it’s essential to weigh pros and cons of this type of financing before applying. 


Some of the advantages of USDA loans are as follows:

  • No down payment required: One of the best things about USDA loans is that borrowers can buy a house without having to put any money down. This makes homeownership more accessible, especially for folks who are hoping to buy a house with low income.
  • Competitive interest rates: Because USDA loans are backed by the government, lenders face less risk, which means they can offer borrowers better interest rates than they’d be able to on other types of mortgages. 
  • Streamline assist refinance: If you have an existing USDA loan in Idaho, you can refinance it to a lower rate (if available) with little to no paperwork and no appraisal.
  • Flexible credit requirements: USDA loans tend to be more forgiving when it comes to credit scores compared to traditional loans. So if your credit history isn’t perfect, you still might be able to qualify.
  • No PMI needed: Unlike a lot of other loans, USDA loans don’t require private mortgage insurance (PMI), which can in turn lower your monthly mortgage payment. 
  • No penalties for paying early: Unlike some other mortgages, USDA loans won’t hit you with penalties if you decide to pay off your mortgage ahead of schedule. This gives you more freedom to manage your loan repayment.


Like every mortgage product, USDA loans have downsides in addition to benefits. Here’s what to think about when considering USDA loans:

  • Property eligibility: Homes must be in areas designated as rural by the USDA. This means that you won’t be able to use a USDA loan to purchase a home in the center of a big city. USDA loans can also only be used for primary residences, so you can’t use this mortgage to fund a new vacation home or secure an investment property. 
  • Guarantee fees: A guarantee fee is a relatively low upfront and annual payment that all USDA loan borrowers have to pay. This fee keeps the USDA loan program up and running for other borrowers. Idaho guarantee fees are 1% upfront, which can be rolled into the loan, and .35% annually.  
  • Income limits: To be eligible for a USDA loan, your adjusted income (depending on family size) can’t be more than 115% of the median income in the area where you’re buying. This means you can potentially earn too much to qualify for a USDA home loan in Idaho. 
  • Funding limits: The availability of USDA loans depends on having enough funds, which can change over time. So there might be times when there aren’t enough resources, causing delays in getting loan approvals.

How to Qualify for a USDA Loan in Idaho

To qualify for an Idaho USDA loan, there are some important things to keep in mind. Borrowers have to consider both the general qualification requirements for the USDA loan program, as well as lender-specific USDA loan requirements in Idaho. Here are some of the boxes you’ll want to check in order to qualify for a USDA rural development loan in Idaho:

  • Must be a U.S. citizen.
  • A minimum FICO score of 600.
  • Meet the minimum debt-to-income ratio.
  • An applicant’s adjusted income should not exceed 115% of the median income for the area where the desired home is located, accounting for the size of the applicant’s family.
  • Must be purchasing a primary residence. 
  • At least three years must have passed since experiencing a bankruptcy or foreclosure. 

Apply for a USDA Loan in Idaho

If you have all you need to jump into the home-buying process and apply for a USDA home loan in Idaho, then consider partnering with Griffin Funding to streamline the mortgage application and approval process. As an experienced USDA lender, Griffin Funding can help you navigate Idaho’s USDA loan requirements and secure an affordable mortgage. 

We offer plenty of experience and excellent customer service, in addition to free tools like the Griffin Gold app. With the Griffin Gold app, you can prepare yourself for homeownership by managing your finances, comparing mortgage products, privately browsing homes, and much more. 

By teaming up with Griffin Funding, potential home buyers in Idaho can make the most of USDA loans while getting personalized support and guidance every step of the way. Contact us today to learn more about how the USDA loan program works or fill out an online application to get started and lock in your interest rate.