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USDA Loans in Gulf County, Florida: Learn How to Obtain a Zero Down Mortgage

Through its series of mortgage assistance programs, the U.S. government has helped several U.S. citizens buy homes they wouldn't otherwise afford. These federal and state-driven mortgage vehicles often target specific groups of people, such as low to medium-income borrowers, veterans, civil servants, etc.

USDA loans fall into these mortgage assistance programs rolled by the government but are different or unique in several ways.

For instance, these loans have zero down payment requirement, and borrowers with low to medium income can qualify regardless of their occupation. Borrowers with a low credit score may also be eligible for these loans.

We have you covered if you want to use a USDA loan to buy a property in Gulf County, Florida. Keep reading to learn more.

What are USDA Loans?

A USDA loan is a zero-down, fixed-rate mortgage program sponsored by the U.S. government through the U.S.

Department of Agriculture. USDA-approved lenders fund these loans, and USDA guarantees them, meaning they commit to paying a portion of the individual loans if a borrower defaults.

The loans feature below-the-market rates and lower mortgage insurance fees, making them ideal for low– to medium-income borrowers.

USDA expects lenders to vet borrowers against a set of qualification requirements. For instance, the loan should only be used to finance primary residential homes in rural or suburban areas.

An eligible borrower should also have an adjusted household income that doesn't exceed 115% of Area Medium Income (AMI). We have covered this and more in the qualification requirements section below.

USDA Loan Qualification Requirements

Before the lender approves your loan application and proceeds to underwrite, you must meet some essential qualification requirements. These conditions focus more on your income, credit score, property type, and location. Below is a quick overview.

Income Limit Requirements

Lenders are often interested in three types of income – qualifying income, household income, and adjusted household income. Qualifying income is the annual income you earn, often used to determine your ability to repay the loan. The household income is the total income, including commission, overtime, and income from dependent children or relatives living in your household. Your income must fall within the specified limits to qualify for USDA loans.

That said, lenders often pay more attention to the adjusted household income. They calculate the adjusted household income by deducting childcare and medical expenses from the total household income. The USDA income limit for 1-4 households is $103,500 and $136,600 for 5-8 member households.

Credit Score Requirements

Most lenders expect borrowers to have a credit score of 640 and above before approving the loan. However, these loans are flexible since USDA has not set a minimum credit score. Some lenders will, therefore, approve borrowers even with a FICO score of 600, provided they have substantial savings and can prove their willingness to repay the loan.

If you have a less-than-ideal credit score and the lender has a hard minimum of 640, review your credit report and request audits or corrections where necessary. You can also apply with more lenders to increase your chances of getting a deal that suits your unique financial circumstances.

Debt-to-Income Ratio

Debt-to-income (DTI) ratio measures debt or expenses to your gross monthly income. USDA loans a maximum DTI limit of 41%. The higher the debt-to-income ratio, the more debts you have to service, hence the higher the chances of defaulting on the loan. Even so, some lenders may approve lenders with as high as 50% DTI, provided such individuals have an excellent credit score and are willing to make a substantial down payment.

If you have a higher DTI, you can lower it by repaying some of your debts to reduce the monthly debt obligation. Another tip is to find a way to boost your monthly income, e.g., asking for a raise, starting a side business, etc.

Property Requirements

A property eligible for USDA financing must be a single-unit primary residence. The building must have enough utilities, including water and sewage lines, plus it must have proper plumbing, electrical connection, and a warm water supply. It should also be modest at best, having square footage of at least 400 and not more than 2,000.

As far as the overall structure is concerned, the building should be well-built with a solid foundation. The home must also have direct access to a road, street, or driveway. It's worth noting that USDA loans can finance different property types, provided they are single units and meet USDA appraisal.

Location Requirements

Another critical requirement to keep in mind is the location of the property you want to purchase. Ideally, your chosen home should be in a rural or suburban area. Most locations in Gulf County fall into the two categories; hence, most properties qualify for 100% USDA financing. The general rule of thumb is to find a home that is:

  • Within an open county or an area with a rural setting.
  • Located in a sparsely populated area, often not more than 20,000 residents.
  • Not within a Metropolitan Statistical Area.

Working with a local agent can save time during the home selection process and minimize your loan rejection. This is particularly important if you're a first-time homebuyer or new to USDA loans.

How to Apply for a USDA Loan in Gulf County, Florida

Once ready to apply for a USDA loan, find a reliable lender who is USDA-approved. You can seek guidance from your peers or homeowners who have used these loans below. We have rounded up the step-by-step loan application process for your convenience.


The first step in the USDA loan application process is to get pre-qualified with an approved lender. It is a relatively simple step that tells you whether you qualify for the program and gives you a hint on the loan amount you can afford. Typically, the lender will need a general breakdown of your income, assets, debts, and expenses. Once you pre-qualify for a USDA home loan, your lender will give you an estimated loan amount and an account on whether or not you meet the most basic eligibility standards.

USDA Loan Pre-approval

Pre-approval is a more in-depth analysis of your income and overall financial standing. Your lender will determine your debt-to-income ratio (DTI) and confirm the amount you can borrow. During this step, the lender will also ask for your personal and financial documents, including:

  • Tax returns, W-2 forms, and 1099 forms
  • Pay stubs
  • Financial and asset statements
  • Photo ID, social security number, and other essential financial information depending on your occupation.

If you pass the pre-approval stage, the lender will award you a certificate of approval that you can use during house hunting.

Finding a USDA-approved Property

Once you have decided on the property types you want, proceed to explore the different options available in the market. Many single-unit homes in Gulf County are eligible for USDA financing. Still, you want to work with a knowledgeable agent who will guide you through the selection and negotiation process.

Signing a Purchase Agreement

Once you've found the perfect house, you'll make an offer with the help of a realtor. If you are on a budget, you want to find a seller willing to cover a portion of the closing fees. Once both parties are satisfied with the offer, you can proceed to sign a purchase agreement. This purchase agreement specifies the payment terms and conditions in which you will pay for the property. The latter is a document that puts you and the seller under contract.


After you present a signed purchase agreement to the lender, the USDA loan underwriting process begins. The lender will do all the necessary background checks on your loan documentation before requesting property inspection and appraisal. These two are required to ensure the property qualifies for USDA funding. It's worth noting that USDA underwriting takes longer compared to conventional mortgages. This is because the underwriting process follows a two-step process, one by the lender and the other by USDA.

Final Approval & Closing

Once the lender and the USDA have approved your loan file, you'll receive a Clear-to-close notice, which allows you to proceed to the closing day. At closing, you'll sign all the required documents and assume possession of the property. You'll need to move in within the first 60 days and make the property your primary residence.

Happy family with children moving with boxes in a new house

USDA Loan Benefits in Gulf County, Florida

USDA loans come with several benefits. We have highlighted the most important below.

USDA Loans are Affordable

Unlike conventional mortgages or FHA, USDA loans have lower interest rates fixed for all lenders, i.e., regardless of the borrower's credit score or down payment. USDA lenders charge a fixed 1% of the loan amount and an annual 0.35% paid in installments for the entire loan duration. The mortgage insurance premium (MIP) paid for USDA loans is also lower than the private mortgage insurance (PMI) common with conventional mortgages.

Similarly, USDA loans have zero down payment requirement, meaning you do not need to raise a lot of money upfront. This is quite a relief for borrowers who earn low to medium income and doesn't have substantial life savings.

Flexible Credit Requirements

Borrowers with lower credit scores who won't qualify for FHA or conventional mortgages have a chance with USDA loans. The flexible credit guidelines allow lenders to accept borrowers who are still repairing their credit score or those new to the credit and lending system.

You Can Use Closing Cost Assistance

If you need help paying the closing fees, USDA loans allow you to use different closing cost assistance programs. For instance, you can apply for forgiveness loans, tap into seller concessions, or use gift money to settle a portion of your closing fees. This isn't always the case with conventional mortgages.

It Supports Different Property Types

The other advantage of USDA loans is that you can use your loan to finance different property types such as condos, townhouses, and fixer-uppers. You can also use the funds to buy manufactured homes, foreclosure properties, or land for building a new construction home.

Outdoor Activities to Enjoy in Gulf County, Florida

Now that you know how to apply for USDA loans and the minimum requirements you must meet, let's see if living in Gulf County is worth it. Ideally, you want to choose a calm and serene neighborhood with friendly locals and plenty of fun yet family-friendly activities. We have highlighted the five outdoor activities that new residents can enjoy in Gulf County, Florida.

Snorkeling and Diving in the Gulf Waters

St. Joseph's Bay is popular among newbie and expert snorkelers, thanks to the incredible underwater scenes from as shallow as 2-3 feet. You can also swim or wade through the warm waters as you hunt for the treasured scallops. Some of the top snorkeling spots in the southeast U.S. are in Gulf County, Florida.

If you are an experienced diver, you'll enjoy Gulf County's artificial reefs. There are over 200 reefs, each at varying depth, often between 20 and 150 feet. At 108 feet is the renowned 463-foot-long Empire Mica, a British tanker taken down by a German submarine during World War II. Inside this and many other reefs is good natural light ideal for underwater photography.

Kayak the Dead Lakes

As the name suggests, Dead Lakes is home to hundreds of live and dead Cypress and Tupelo trees, most of which stand in the waters. The landscape is scenic and popular among photographers who love to capture nature at its best. Go out on a kayak with your family or friends and paddle on the legendary dark waters as you explore the pristine wilderness this place has to offer.

From the mossy branches and beautiful lake-side vegetation to the unique shapes of cypress dotting the lakes, spending time here is a great way to create life-long memories. Dead Lakes is also home to various bird species such as Heron and Ibis. Consider having an expert guide on board, as it's easy to wander into the unknown.

Enjoy Fun Times with Kids

Gulf County offers several family-friendly activities, which your kids will love. Some fun-to-do things include turtle walking and shelling on the 43-mile shoreline. Popular shelling spots include the Cape San Blas, Indian Pass, and St. Joe Beach, ideal for that weekend or lazy afternoon treat.

Another fun activity you can try is horseback riding on the famous Cape San Blas. You can also try bonfires on the beach as you roast marshmallows and trade incredible stories with family or friends. Whether you want a private family excursion while taking incredible photos or a ride into the sunset, this is the perfect place to be.

Go Fishing

Fishing is a fun year-round activity in Gulf County that you can enjoy solo or with family. Gear up and jump on a fishing expedition in Port St. Joe, Cape San Blas, or any spot along the Gulf Coast. If you are interested in freshwater fishing, book a fishing trip in any freshwater fishing spots such as the Apalachicola River, Lake Wimico, or the Chipola River. For new residents or visitors, consider joining a group on a fishing expedition or hiring a fishing charter that offers guides, tours, and fishing licenses.

Bike or Hike the Beautiful Gulf County Trails

Gulf County offers beautiful paths and trails for hikers, backpackers, and cyclists. Some cornerstone trails include the Loggerhead Run Bike Route, which runs from Cape San Blas to Port City Trail in the center of Port St. Joe. Hikers and backpackers, will also enjoy unique trails with incredible scenes and picturesque landscapes with lots of natural gulf coast vegetation.

Some perfect places to hike include the St. Joseph Buffer Preserve, the T.H. Stone St. Joseph Memorial State Park, and the Maritime Hammock Trails. The latter features multiple terrains, including sand, dirt, and wood, ideal for true nature lovers.

Bottom Line

If you want to purchase a home in Gulf County, you'll have several locations and property options. USDA loans are an ideal mortgage program for low to moderate-income borrowers. Besides the peace of mind and serenity you'll find in most residential hubs, you'll also enjoy several amenities and fun outdoor activities ideal for outgoing residents and families.

When choosing a home on-sell, consider working with a local agent experienced with USDA loans to help you pick the best property in the correct location. Get pre-approved for a USDA loan today and begin your homeownership journey from the right footing.

With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.

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