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USDA Loan Frequently Asked Questions

Do I have to put a down payment? 
Loans may be for up to 100 percent (102 percent if the guarantee fee is included in the loan) of appraised value or for the acquisition cost, whichever is less.

Is everyone eligible for a USDA home mortgage loan?
To be eligible, applicants must:

  • Purchase a primary residence. Investment properties are not allowed.
  • Have an adequate and dependable income;
  • Be a U.S. citizen, qualified alien, or be legally admitted to the United States for permanent residence;
  • Have an adjusted annual household income that does not exceed the moderate income limit established for the area. Please contact us to determine the income limit in your area. A family’s income includes the total gross income of the applicant, co-applicant and any other adults in the household. Applicants may be eligible to make certain adjustments to gross income such as annual child care expenses and $480 for each minor child in order to qualify.
  • Have a reasonable credit history.

Does every home qualify for a New Mexico USDA Home Loan?
Homes That Qualify:

  • New or existing homes.
  • Existing homes must be structurally sound, functionally adequate, and in good repair;
  • There are no restrictions on the size or design of the home financed;
  • The home must not be used for income-producing purposes;
  • Homes must be located in rural areas (some city outskirt areas may qualify. Contact us to double check.)

What is considered a rural area?
Rural areas include open country and places with a population of 10,000 or less and under certain conditions towns, cities, and outskirts with between 10,000 and 25,000 residents.
Contact us to determine if the area you are looking in can qualify.

Are USDA home mortgage loans the same as traditional mortgage loans?

USDA home mortgage loans are on a 30 year fixed rate term and provide interest rates that are usually equal to or sometimes lower than traditional financing making it more attractive to home buyers.

Can I refinance my mortgage if it is not a USDA home mortgage loan?
No. Loans may be made to refinance only existing USDA home mortgage loans.

Are there any USDA fees?

For purchase loans, a one-time guarantee fee equal to 2.0 percent of the loan amount is charged.

The buyer also has an option to finance this charge but at a different percent depending on the loan amount. The charge for refinance loans is 0.5 percent.

After the one-time fee is paid, there is no recurring monthly expense charged for guaranteeing the loan.

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