Skip to content
Fact Checked by Experts

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

With the majority of Indian River County in Florida classified as rural, there is no scarcity of houses on the market. Thanks to the USDA Rural Development mortgage programs, rural residents who want to buy a house can do so without having to save for a down payment.

The USDA loan is a government-sponsored program that assists people in purchasing homes in rural communities.

What exactly is a USDA home loan?

A USDA home loan is a type of mortgage that offers significant advantages to people looking to purchase a single-family principal home in a rural community or eligible suburb location.

The loan is backed by the United States Department of Agriculture and is provided by private lenders. USDA loans do not require a downpayment and are primarily for low-income individuals.

What Are the Benefits of USDA Loans?

The USDA Mortgage Loan is an excellent option for borrowers who want to purchase a home without scraping up for a down payment.

However, contrary to the program name, USDA programs aren't limited to underdeveloped and rural areas. The loans are being handed out all over the county, including suburbs far from rural communities.

That means you can get a USDA-eligible property outside the county's major cities.

The program was created to facilitate easy and affordable homeownership for low and moderate-income earners. The loan program aims to boost economic development and growth in rural areas across the country.

USDA loans offer fixed-rate mortgages with up to 30-year repayment periods and various refinancing options. However, you can not refinance other loan types with a loan from the USDA.

Some of the advantages of the USDA mortgage program include:

  • Zero down payment needed
  • Low 30-year fixed rate

  • 102% financing, i.e., you get a loan equal to the full price of the negotiated home purchase contract plus an extra 2% guarantee fee paid for or financed by the seller)

  • Closing costs can be financed if the house's appraisal value exceeds the sales price.

  • Competitive rates (vary by lender)
  • Gift funds are accepted
  • The borrower doesn't have to make a cash contribution
  • No max loan cap (although family income limits apply)
  • No reserves needed
  • Streamlined approval for individuals with FICO scores above 640
  • Can be refinanced into better interest loans if available
  • Little to zero mortgage insurance needed

What are the USDA loan program requirements?

There are credit and income requirement criteria that one must satisfy to qualify for this loan program. These criteria are set by either the USDA, private lender, or both. Some of them include:

  • Proof of US citizenship or permanent residence

  • Two-year history of stable and sustainable income

  • Acceptable DTI (debt-to-income ratio) as set by the lender underwriting team

  • Applicant's adjusted annual income must be less than 115% of the county's median income for their family size

  • The negotiated home must fall within eligible rural communities or suburb location

  • Applicants must be in a position to make loan repayments on time

Keep in mind that while the Department of Agriculture has not specified any credit score thresholds, lenders have the carte blanche to set their own. Most require a minimum FICO score of 640 to offer home loans with USDA Guaranteed Underwriting System terms. Individuals with FICO scores below 640 may still be eligible for USDA loans with some manual underwriting.

What are the household income limits for the USDA program?

The USDA first-time homebuyer loan program is mainly for low and moderate-level earners. The program has the following household income limits requirements:

  • $90,300 for households of 1 to 4 members
  • $119,200 for households of 5 to 8 members

How is the household income calculated? The USDA considers the yearly incomes of every single adult in a household, whether they are involved in the mortgage or not. However, the program adjusts the yearly incomes for allowable deductions like medical expenses first.

What are the property requirements for the USDA loan?

The USDA loan program is exclusively available to low to medium-income first-time homebuyers looking to buy a home in rural communities. According to the program's definitions, eligible rural communities are those with rural features and less than 35,000 total people population. The areas should also be lacking mortgage programs for low to moderate-income households. Some suburban communities are eligible for this loan program too.

You may be able to buy a home with acreage as long as the acreage is the norm for the location and won't be used to generate income. However, USDA funds are for purchasing single-family principal homes only. You cannot apply for this loan program to snatch up property investments and vacation homes.

What USDA loans can you apply for?

The USDA loan program offers the following three types of home loans:

  • 502 Direct Loans aka Single-Family Housing Direct Home Loan - these are issued by the USDA itself and are available to households whose income class is low or very low. There are various earning requirements depending on the applicant's location. The interest rate also fluctuates depending on the applicant's credit profile and other factors. The highest interest rate possible is 3.25%, but there are subsidies to reduce it to as low as 1%. The maximum typical loan period is 33 years but can be extended to 38 years based on your income.

  • Home Improvement Grants and Loans – these loans or financial awards are issued to homeowners who want to improve or renovate their homes. They are usually available in combinations of loans and grants capped at $27,000.

  • USDA Guaranteed Loans – these are issued by approved private lenders and backed by USDA, ensuring cheaper than market interest and zero down payment requirement. The USDA guarantees 90% of the loan amount and does not demand mortgage insurance; instead, the approved lender pays a guarantee fee to the USDA, which is deducted from your monthly loan payment.

USDA 502 Direct Loan vs. Guaranteed loan program

The main difference between 502 direct loans and guaranteed loan choices is who issues the funding. The USDA provides the 502 direct single-family home loans plus payment support through subsidies. On the other hand, the guaranteed loan is provided by USDA-approved lenders. Both loan programs are designed to make homeownership more affordable for rural families with low to medium household incomes.

However, they differ in several ways because they are not from the same institution. For instance, here's a look at the eligibility requirements for the direct loan.

Who is eligible to apply for the USDA 502 direct loan?

Several variables are considered when establishing an applicant's suitability for the Single-Family Direct Mortgage Loans. To qualify for a direct loan, borrowers' adjusted income must be less than the low-income threshold for their neighborhood. Plus, the borrower must show motivation and capability to repay debt.

Additionally, program participants must:

  • Be unable to find appropriate, safe, and clean housing
  • Have modest to very low household
  • Be unable to secure a mortgage on reasonable terms from other institutions
  • Commit to using the property as a primary residence.
  • Have the legal authority to take out a loan
  • Still, be able to take part in federal loan programs
  • Meet the conditions for citizenship or eligibility as a non-citizen.

Meanwhile, direct USDA loan financed properties must

  • Be less than 2,000 sq. ft.
  • Not exceed the area loan limit cap in terms of market value
  • Not be used for revenue-generating purposes

When the property title is, or the borrower no longer lives in the house, the borrower is compelled to refund all or a part of the payment assistance received over the mortgage.

What can be done with funds from the USDA program?

Loan funding could be utilized to assist low-income families with the purchase of a primary residence in an eligible rural location. Families can also use the funds to construct, repair, refurbish, or relocate their homes, as well as to acquire and develop sites, including the installation of water and sewage systems.

How much are you allowed to borrow?

Potential candidates can use the 502 Direct Home Loan Self-Assessment tool to see if the single-family housing direct home loan is a good option for them before applying. After you provide information about your overall household composition, regular income, debts, house location, projected property taxes, and expected risk insurance, the software will generate a provisional review.

However, regardless of the results from the online tool, you are still encouraged to submit an official application to USDA Rural Development (RD). RD will assess your eligibility using supplied, verifiable information and establish your maximum loan amount based on the county loan limit and your ability to repay the loan.

Real Estate Agent showing where to sign on document for buy house contract

What are the repayment period and interest rate on the 502 direct loans?

Unlike the guaranteed loan program, which allows participating lenders to establish their rates, the USDA sets the rates for the direct loan option. Generally, USDA mortgages boast lower rates in the property market.

Usually, the borrower's credit profile is the most crucial component in setting interest rates, although various contributing factors are considered too.

Borrowers with excellent credit profiles get lower rates and vice versa. However, borrowers with less-than-perfect credit ratings may still get inexpensive rates thanks to the USDA's subsidy programs.

The following is a breakdown of the direct loan rates and repayment period:

  • For moderate- and low-income applicants, the cost of borrowing for the Direct home loans is 3.00 percent

  • However, subsidy programs may be used to get the interest rate to as low as 1%

  • Fixed interest rates are set according to the market rate at the time of loan approval or closing (the lowest rate is picked)

  • Up to a 33-year repayment duration is available, with a 38-year repayment period available for exceptionally low-income borrowers who cannot afford the 33-year repayment period.

What are the eligible rural areas in Indian River County?

You can check the USDA Eligibility Portal to look for a specific location or scan the map to see what areas are eligible for the USDA loan program.

How to apply for this loan program

Contemplating applying for a USDA home loan? It would help if you dealt with an approved lender. Once you've identified a lender, you'll need to provide information about the home you want to buy, the loan size, your monthly bills, overall monthly income, and assets.

The lender will then request your credit report to pull your credit score. The lowest acceptable score differs by lender, although most accept scores from 640.

Once you've determined that you're eligible for the USDA loan, you'll need to prepare the following documents to include in your application:

  • Pay slips from the recent pay period
  • Authentic ID
  • Bank statement
  • W-2 statements

You may be asked to bring other documents besides the above-listed, depending on the lender you are working with.

Is there a timeframe for applying?

This program accepts applications all year through your county RD office.

The USDA loan application procedure

Each house buyer's journey with the USDA-RD loan is unique, although it generally entails the following steps:

  • The pre-qualification process with a USDA-approved lender

  • Submitting all required paperwork for pre-approval

  • Negotiating a USDA-approved real estate contract in an eligible rural community or suburb location that meets your preferences

  • Brining in the USDA for appraisal and signing the purchase contract

  • Awaiting loan processing and underwriting

  • Closing the deal on the house

Processing time might range from 30 to 60 days depending on funds availability, the sufficiency of your application package, and program demand in the county. The loan officer you are working with should be in a position to give you an estimate of how long it will take.

Refinancing a USDA loan in Indian River County

Refinancing is how property owners take advantage of changing market interest rates. Some loan programs allow homeowners the flexibility of refinancing their loans from one type to another (usually of a lower rate).

For example, you can refinance a higher-rate USDA loan to a different low-rate loan and cut down your monthly interest expenses. However, sometimes refinancing may result in increased finance charges throughout the loan. The USDA mortgage refinancing options are as follows:

USDA streamline refinance

Homeowners who've made timely payments for the preceding 12 months can refinance without seeking a fresh appraisal. While a USDA streamlined refinancing cannot be cashed out, the guarantee expenses can be rolled into the ultimate loan amount.

USDA streamline assist refinancing

You can refinance without getting a new appraisal, debt-to-income assessment, or a credit check with this service for $50. The refinance service is also offered to homeowners with little or zero home equity.

USDA non-streamlined refinance

The USDA non-streamline refinancing option works like the above streamline assist alternative, but homeowners must seek a fresh appraisal first. However, unlike the streamline assist option, there's no $50 charge.

Local information about Indian River County in Florida

Indian River County, on Florida's Treasure Coast, is one of the loveliest seaside towns in the country. It includes the Sebastian-Vero Beach, part of the Miami-Fort Lauderdale-Port St. Lucie, Florida Metropolitan Statistical Area.

According to the 2020 census, the country has 37,647 families and 60,959 households. The median income for households in the county is S $39,635. This country marks the start of Florida's Treasure Coast, which is recognized for its enormous peaceful beaches.

It's one of the best places to live in Florida due to its low crime rate, excellent education system, plenty of employment opportunities, zero income tax, and a variety of pastime activities such as horseback riding, kayaking, boating, fishing, golfing, and wildlife watching at the Manatee Overlook or other county parks and museums.

With a median home price of $270 800, the cost of living is slightly lower than the rest of the county. Depending on where you wish to reside, you might be able to buy your first house without putting down any money, thanks to the USDA loan programs.


The Guaranteed and Section 502 Direct Loan initiatives of the USDA Rural Development program provide a road to homeownership for medium and low-income households residing in rural areas and those with no other means of achieving affordable homeownership.

Several rural Indian County areas in Florida are experiencing a housing shortage and a population decline. Insufficient availability of good quality cheap housing is a major cause of business and population decline in rural areas.

USDA Rural Development house loans are a great way to ensure that rural communities have the housing options they need to thrive economically and socially. Providing these inexpensive homeownership choices encourages prosperity, which leads to strong communities and better quality of life.

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.

Find The Right Mortgage

For more than 20 years, Phil have been helping customers achieve their home purchase and refinance goals by providing them with invaluable resources and support.

Schedule a FREE Consultation
Phil Ganz

Subscribe to Get Your First Time Homebuyer Checklist

Sign up for the weekly newsletter to stay up to date on the latest real estate market trends, loan news, and so much more!