The U.S. Department of Agriculture’s mortgage loan program has become popular in recent years because it allows people to buy a home with no money down and low monthly mortgage insurance, writes Scott Sheldon for But not everyone can qualify.

The USDA offers this mortgage loan program to help less-industrialized areas attract more homeowners. It determines certain areas in each county nationwide that allow borrowers to put no money down and purchase a home with a 30-year fixed-rate mortgage. The USDA will only grant loans to borrowers aiming to buy a single-family house for less than $375,000 and loan applicants must not earn more than $97,000 per year.

Until the USDA adjusts its requirements, USDA loans generally will remain out of reach for prospective homebuyers. Of course, the biggest obstacle, aside from figuring out which mortgage loan program is best for you, is getting the house in contract. Many sellers consider a USDA loan offer from a client with 100% financing less attractive than a borrower with down payment funds. Knowing this fact alone may help you get an offer accepted than going with a loan that’s inconsistent with the local housing market.

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