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

The USDA home loan program has enabled many Americans to purchase or refinance homes with zero down payments at closing. These mortgages are insured by the United States Department of Agriculture, enabling private lenders to offer benefits that aren't available with conventional mortgage options as a rural or suburban homebuyers.

If you want to purchase a home in Hernando County, Florida, an affordable home financing option can help you in this regard.

What is a USDA Loan?

A USDA Home Loan, also referred to as the USDA Rural Development Guaranteed Housing Loan Program is a 30-year fixed-rate mortgage loan program that the USDA offers to rural and suburban property owners. A USDA loan offers significant benefits if you purchase a home in an eligible area.

A USDA loan requires no down payment. This means it offers 100 percent financing of the home value if you are a qualified buyer. The loan also allows all closing costs to be financed into the loan or paid for by the seller.

There are two types of USDA loans – Direct Loans and Guaranteed Loans. Direct loans are targeted toward low or very low-income households. With a Direct Loan, the USDA issues the loan and offers payment assistance via a subsidy.

With a guaranteed loan, a lender approved by the USDA issue the loan, which the USDA insures or guarantees. The guaranteed loan generally targets moderate-income households. Private lenders issue the loans, which the USDA insures or guarantees. Approved lenders under the loan program include:

  • State housing agencies are lenders that the U.S. Department of Housing and Urban Development (HUD) approves for application submissions for Federal Housing Mortgage Insurance.

  • U.S. Veterans Administration as an approved mortgagee

  • A Ginnie Mae mortgage-backed securities issuer

  • Fannie Mae family mortgage loans issuers

  • Freddie Mac family mortgage loans issuers

  • Any Farm Credit System(FCS) institution with direct lending authority

  • Lenders participating in loan programs guaranteed by the Farm Service Agency and other USDA RD loan programs

The USDA loan program aims to offer affordable homeownership opportunities to eligible households with low to moderate incomes. The essential purpose of the loan program is to stimulate economic growth in rural and some suburban areas throughout the United States.

The property you seek to purchase in Hernando County should be within the USDA Home Loan's footprint. According to the Housing Assistance Council, USDA loans are available in 97% of the country's landmass, including Hernando County, Florida.

The Benefits of a USDA Loan

Since the USDA guarantees these loans, lenders are more open to taking risks and providing eligible homebuyers with advantageous terms and rates. One of the primary benefits of a USDA Home Loan is zero down payments. As a first-time homebuyer in Hernando County, a USDA loan offer a homeownership opportunity if you otherwise cannot afford the conventional 5 to 20% down payment requirement of traditional mortgages.

Another benefit of a USDA home loan is competitively low-interest rates. As an eligible borrower in Hernando County, USDA home loan rates are generally lower compared to latter loan and conventional programs. With US government backing, lenders don't have to introduce significant risk adjustments on their pricing as they do with FHA and conventional loan products.

USDA loan interest rates are calculated based on several factors. Your credit profile is the primary factor, as is the case with conventional mortgage options. You will generally receive the most competitive rates if you have a high credit score. However, due to USDA insurance, you can still receive low rates even if you have less than stellar credit. The lenders set their interest rates which may vary based on the abovementioned factors. The USDA doesn't formulate interest rates.

A USDA home loan also features flexible credit requirements and low monthly mortgage insurance. A USDA home loan requires a monthly mortgage insurance premium based on up to 0.5% of the loan balance annually. The premium charge per month is arrived at by dividing the annual premium by 12. As of 2019, the USDA home loan mortgage insurance annual fee is 0.35%. The loan also requires 1% of the amount in funding fees (upfront).

USDA Loan Eligibility Requirements

The USDA implements its requirements and guidelines, including eligibility requirements for the property and the homebuyer. The lenders will also often have their internal requirements and guidelines in addition to those set by the USDA.

To qualify for a USDA home loan, you must meet several income and credit criteria that the USDA and lender set forth. Below are the minimum USDA loan eligibility requirements:

  • You must be a U.S. citizen or permanent resident.

  • You must have a dependable income (two consecutive years).

  • You must have the ability and willingness to repay the loan. You should generally have no collections or late payments one year before your USDA home loan application.

  • You must have an acceptable debt ratio (DTI). The debt ratio may vary depending on the lender and several other factors.

  • Your adjusted annual income should not exceed 115% of the area median income, depending on the family size. The income limits change annually.

  • You must be unable to qualify for loans from other sources on terms you can reasonably expect to meet.

  • You should be without adequate (decent, sanitary, and safe) housing but be able to afford mortgage payments, including insurance and taxes.

  • The home must be located in a qualified rural or suburban area.

It's worth noting that the USDA doesn't have a minimum credit score requirement. However, many lenders will require that you have a FICO credit score of at least 640 to use the Guaranteed Underwriting System offered by the USDA. One of the main benefits of a USDA home loan is that you can purchase a home in Hernando County even with poor credit.

Property Eligibility Requirements

The USDA loan is available to you if you wish to purchase a home in what the USDA defines as a rural area. The USDA considers a rural area as an area with a population of fewer than 35,000 inhabitants, has a rural character and lacks mortgage credit options for low and moderate-income families. However, some suburban areas are eligible as well.

Also, you can only use the USDA home loan to purchase a single-family home that will be your primary residence. This means you cannot use the USDA loan to purchase vacation homes or commercial/rental property. The property's market value must not exceed the applicable area loan limit.

A home with acreage may qualify as long as the size is typical for the area and you won't use it for income-producing ventures. Note that the boundary lines for properties that qualify for USDA loans may change each year.

Loan Income Limits

The USDA Home Loans program aims to help low to moderate-income homebuyers. As such, the USDA formulates income limits based on the location of the property and the household size. In setting the income limit, the USDA accounts for the total annual income of each adult household member regardless of whether they are participating in the loan or not.

The USDA ultimately considers adjusted annual income. This figure accounts for acceptable deductions for medical expenses, child care, and more. To qualify, your adjusted annual income must not exceed 115% of Hernando County's median income. The base USDA home loan income limits for Hernando County include:

  • $103,500 for 1 to 4-member households
  • $136,600 for 5 to 8 member households

Maximum Loan Limit

As of March 9, 2022, the maximum single-family housing direct loan limit for Hernando County is $336,500.

Happy family with kids bought new home

How to Obtain a Zero Down USDA Home Loan

The USDA loan application process will be different for different homebuyers. Nonetheless, the general process can be summarized in several steps, including:

  • Prequalifying with an approved lender
  • Provide all the required documentation and be preapproved
  • Finding a USDA-approved property in an eligible rural or suburban area
  • Signing a property purchase agreement and ordering a USDA appraisal
  • Loan processing, underwriting, and then closing on the home

Find and Prequalify With an Approved USDA Lender

Finding an approved USDA lender is the first step toward obtaining a USDA loan. Numerous conventional loan lenders provide USDA loans. However, some only provide a few USDA loans every year. Finding a lender that specializes in USDA loans is a big plus.

After finding a lender, you must get prequalified. USDA loan prequalification is a simple task. It estimates what you can afford and your eligibility status for the USDA Home Loan program. Your lender will inform you of any red flags and other aspects that can prevent you from qualifying for THE USDA loan.

Prequalification can save you effort and time by narrowing down the homes in Hernando County that you may be able to buy. You can obtain the USDA prequalification online, depending on your chosen lender. You have to be prepared to answer initial questions regarding your financial situation.

Providing Documentation for USDA loan Pre-approval

USDA Home Loan preapproval is more thorough than prequalification. This process involves assessing your actual financial situation rather than estimates. Your lender verifies information regarding your finances and income. Some standard documents that are required for pre-approval include:

  • Photo ID
  • Pay stubs
  • Bank statements
  • Tax returns and W-2s
  • Social Security awards letter

Your lender will ascertain the amount you can borrow by determining your debt-to-income ratio (the amount of your monthly income that goes towards expenses) and verifying your income information. Pre-approval is a crucial step if you want to purchase a home in Hernando County.

Real estate agents and home sellers prefer offers from pre-approved buyers. Note that preapproval doesn't guarantee you will obtain a USDA loan. You must meet other supplemental conditions such as further employment, income verification, and a satisfactory appraisal.

Locate a USDA-Approved Home

Find a reputable real estate agent and begin your property search. An agent with USDA loan experience can help you find a home eligible for USDA funding. The home must meet the property eligibility requirements mentioned earlier. It must be situated in an eligible rural or suburban area and serve as your primary residence.

Sign a Purchase Agreement

After finding a suitable home in Hernando County, you will discuss it with your real estate agent and lender to make an offer. You can negotiate with the seller about covering the closing costs.

The USDA requires an appraisal to safeguard the homebuyer. An appraiser ensures that the property meets USDA standards and you can move in. Your lender will order a USDA loan appraisal once you sign a purchase agreement with the seller.

USDA Loan Processing and Underwriting

An underwriter will review your details and examine your application and documents for accuracy once you're under contract. The USDA loan underwriting process often takes longer than conventional mortgages since it relies on a two-party approval model.

Your lender underwrites the loan file according to USDA requirements. Then the USDA underwrites the file manually or automatically (Guaranteed Underwriting System). Once the underwriters are satisfied, you can move on to the final closing stage.


You will receive a Clear to Close after the USDA and your lender sign off your loan file. This means you can move on to closing day, where you will sign the required paperwork, finalize the USDA loan and take ownership of the new home.

Fun Outdoor Activities in Hernando County, Florida

Once you purchase your dream home in Hernando County, there are numerous engaging outdoor activities that you and your family can enjoy.

Enjoy Tom Varn Park

Tom Varn Park is located in Brooksville, the county seat of Hernando County, Florida. You can find the beautiful park conveniently situated at the heart of the city. Tom Varn Park is a free, family-friendly attraction incredibly popular with activity-minded residents and visitors. This park boasts several trails, which are great for morning or afternoon strolls or runs.

The park also has numerous amenities, including picnic areas and covered pavilions. Children will enjoy the playgrounds, baseball diamonds, and swings. Further, Tom Varn Park hosts many festivals and fairs throughout the year. The Annual Art in the Park arts and crafts festival is among the most popular.

Thrills at FLG X Adventure Course

FLG X Adventure Course is a hidden gem in Tampa, Hernando County. This family-friendly destination features four adventure courses nestled in a lush forest. Each course has around 10 to 20 zip lines and obstacles. The whole family can climb rope walls, cross wobbly bridges, swing through trees and zoom down thrilling zip lines, including a 500-foot zip line.

Treetop features include rope swings, cargo nets, bridges, tunnels, and ladders. All in all, FLG X Adventure Course offers challenging, physical, confidence-building, safe, and fun adventures that will thrill people of all ages. The FLG X staff members are always nearby to ensure a fun but safe adventure.

Hernando Oaks Golf and Country Club

Florida is one of the country's top golf destinations. The Hernando Oaks Golf and Country Club is the premier golf course in Hernando County. Located in Brooksville, this golf and country club features a championship-level 18-hole course and a trendy restaurant.

Hernando Oaks Golf and Country Club is suitable for golf players of nearly all ages and skill levels. The golf course is among the longest in the county and the state. You can book tee times and restaurant reservations online.

Visit Boyett's Grove

Boyett's Grove offers a unique combination of a wildlife park, citrus farm, and prospector's camp. This fantastic local attraction on Spring Lake Highway often exceeds the guest's expectations. Boyett's Grove has no shortage of fun outdoor activities the whole family can enjoy.

You can feed animals at the wildlife park, explore the aviary and dinosaur cave, and enjoy kayaking. Boyett's Grove boasts a mini-gold course, a gift shop, gold prospecting areas, an art gallery, and an ice cream parlor.

Fun at Hernando Beach and Community Park

Hernando Beach and Community Park is a sizeable three-acre park and beach that is ideal for family outings. Swimming, fishing, picnicking, and water skiing are just some activities you can enjoy in this popular spot. The park features numerous amenities, including picnic tables, basketball courts, pavilions, playgrounds, volleyball courts, barbecue grills, and a shuffleboard court. You can use these amenities on a first-come-first-served basis.


Many low- and moderate-income Floridians have taken advantage of the zero down payment USDA Home Loan program to purchase their dream homes. If for any reason, you cannot obtain a traditional mortgage, a USDA loan offers an affordable and advantageous option to become a resident of Hernando County, Florida.

Hernando County is great for raising a family and boasts many attractions and activities. With the USDA Home Loan program, affording a permanent residency here might be within your reach.

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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