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

Levy County. What comes to mind when someone mentions this Florida haven? Yankeetown? The Cedar Key city? Either way, Levy has earned its position on the global map. So, would you like to live in Levy County? If yes, here's some good news: The United States Department of Agriculture (USDA) can help you buy property in this region. How?

Well, the USDA has several loan programs designed to help low-and-moderate-income prospective homeowners afford decent housing in eligible areas in Levy County.

If you want to know more about USDA loans and what they entail, you're in the right place. This piece will introduce you to USDA loan options and all there's to love about Levy County.

Are you ready? Let's dive in!

An Overview of USDA Loans

USDA loans are mortgages tailored for low-and-moderate income Americans living in eligible rural areas.

The United States Department of Agriculture (USDA) introduced these loans as a last resort for individuals that can't afford homes or get assistance from other financial entities. So, if you live in a rural area, you may apply and qualify for a USDA loan, provided you are ineligible for other conventional mortgages.

Furthermore, the USDA loan program's other objective is to help individuals that can't afford adequate, safe, modest, and decent dwellings do so without a hitch. Why is this important?

Decent housing reduces exposure to stress, infectious diseases, and toxins. That is one of the reasons why homeownership is one of the crucial pillars of the American Dream.

Depending on circumstances, you may get a direct or USDA-guaranteed home loan from this program. That brings us to our second topic: types of USDA loans.

Types of USDA Loans

The USDA avails the following solutions to eligible applicants:

Direct home loans

Direct loans fall under the Rural Home Loans (Direct Program) category. The Direct Program helps low-and-very-low income participants who need decent and sanitary housing. Some people may refer to this platform as the Section 502 Direct Loan Program, which is also correct.

How does the direct loan program work? Simply put, it provides payment assistance to borrowers, bolstering their repayment ability. If you don't know what payment assistance is, consider it a subsidy that cuts your mortgage payments for a brief period.

At this point, you likely wonder how much payment assistance you can get from the USDA direct loan program. Generally, the USDA uses your family's adjusted income to determine the exact amount you deserve. That means they factor in total annual income less allowable deductions like childcare and medical expenses.

Before proceeding, note that USDA direct loans come directly from the United States Department of Agriculture. So, you can't get them from any other private lenders.

To qualify for this loan, you must prove you lack safe, sanitary, and decent housing but can't resolve this issue because no other entity is willing to give you a loan. The property you plan to occupy should also be modest and designed solely for occupation as your primary residence, not income-producing activities.

You can also use direct USDA loans to build, renovate, or relocate an eligible home. And the maximum amount you will get is dependent on your ability to repay the loan. Finally, this loan comes with a fixed interest rate based on present-day market rates.

USDA-guaranteed home loans

As the name suggests, USDA-guaranteed loans are backed by the United States Department of Agriculture. What does that mean? The USDA lets private lenders finance applicants while the department supports the loans against default.

In simpler terms, the USDA helps approved lenders provide 100% financing to low-and-moderate borrowers through the guaranteed home loan program.

But, unlike conventional mortgages offered by most private entities, these require zero down payment. USDA's only role is to help lending institutions minimize risk through 90% loan note guarantees.

Is a guaranteed home loan exclusively for purchasing a home in an eligible rural area? Not necessarily. You can also use it to rehabilitate, improve, or relocate the house. And, if building a new is imperative, you may use the funding to cover expenses.

Before applying for a USDA-guaranteed zero down-payment loan, note that this program is for applicants whose household income doesn't exceed 115% of their area's (where the eligible home is located) median household income.

Moreover, this loan program requires applicants to be ready to occupy the property in context as their primary residence, not a second home, vacation property, etc. Not to forget, guaranteed loans have no set purchase price or acreage limits.

Home Improvement loans

USDA loans don't start and stop at providing more homeownership opportunities. If you live in an eligible rural area and need home repair assistance, the 504 Home Repair program from the USDA Rural Development can help you.

Generally, the home repair program helps eligible low-income homeowners to fix or replace various components, including the windows, door, and roofing system. So, if your home has several problematic areas categorized as health and safety hazards, the USDA may help you mend them. What's the catch?

To get a home improvement loan from the USDA, you must own the home in question, and your income should be below 50% of your area's median income. That isn't all. The 504 Home Repair program is for people who can't get affordable credit from any other source.

Benefits of USDA Loans

If you need a convincing reason to apply for USDA loans, here are five:

Zero Down Payment

Can't afford a down payment? No worries! USDA loan programs don't require you to put money down on a home.

Many low-and-moderate-income borrowers can't afford down payments for apparent reasons. And that is a significant problem because most lenders require applicants to prove they are financially responsible and ready to purchase a property by paying a down payment.

Luckily, the USDA doesn't demand a down payment. Rather than spend years raising enough to put down on the house of your dreams, why don't you get 100% zero down payment financing from the USDA direct or guaranteed loan programs?

Flexible Credit Requirements

Did you know that 22% of US consumers don't have credit scores, and 11.1% have poor ones? These numbers represented a chunk of the US population that, before USDA loan programs, had low chances of getting mortgages, if any. Why?

Most mortgage lenders fund borrowers with a 620 minimum credit score. They use this criterion to identify applicants more likely to pay off their debts on time. Where does that leave individuals with low credit? In a tricky position.

But all isn't lost because the USDA'S credit score requirements are flexible. Strictly speaking, this platform doesn't have a fixed number, but its automatic loan underwriting system is only for participants with at least 640 credit scores. Still, borrowers below 640 can qualify for loans but must undergo manual underwriting.

Seller Concession

Most lenders require borrowers to pay processing fees known as closing costs when they close on their loans. So, you can safely assume that closing costs are charges you incur before completing your mortgage.

Mortgage loan closing costs often equal 3-6% of the property's purchase price. If you are eyeing a home worth $200,000, expect the closing costs to range between $6,000 and $12,000. That is a considerable sum for most low-and-moderate-income individuals.

But don't worry. If you buy a house from a seller who offers to cover closing costs, the USDA won't stand in your way. The reason is USDA loan programs allow seller concessions. So, if a seller wants to help you pay these expenses, they can do so, provided their contribution doesn't exceed 6% of the sales price.

No Prepayment Penalties

Did you know that some lenders charge borrowers a fee after paying off a part of their mortgage or the entire amount early? Weird but true. Financial institutions encourage clients to pay back their principal gradually, over a more extended period. That way, they get to collect more interest.

However, the USDA loan programs don't charge prepayment penalties. Therefore, you can partially or fully clear a USDA loan prematurely without worrying about incurring extra charges.

Don't downplay this excellent pro because these fees can be steep. If you doubt that, consider this: some lenders charge around 2% of the loan balance within the mortgage's initial two years as a prepayment penalty!

Realtor shaking hands with buyer after signing house purchase contract

USDA Loans in Levy County, Florida - Qualification Requirements

Planning to buy a home and live in Levy County? In that case, ensure you are eligible before applying for a USDA loan. Here are some of the factors the United States Department of Agriculture uses to vet applicants:

Property Location

We have mentioned repeatedly that USDA loans are for borrowers in eligible rural areas. What does that mean?

According to the USDA, an eligible rural area should have no more than 2,500 residents. But it may qualify if it has 2,501-10,000 people but still maintains a rural character.

In addition, if you live in a location with a 10,001-20,000 population, the area may be eligible if it's not part of an MSA (metropolitan statistical area). The same applies to regions classified as rural before censuses from 1990 to 2020, provided they currently have a maximum of 35,000 residents.

Household Income

The USDA Rural Development awards guaranteed loans to borrowers that meet household income requirements for each county.

The requirements for Levy County, Florida are as follows: $30,350 (very low income), $48,550 (low income), and $103,500 (moderate-income) for households with 1-4 individuals. If your home has more than four people, the limit increases according. Check out the USDA income limit guidelines for more.

If your household's total income is within the USDA's eligibility threshold, you may qualify for a home loan.


As mentioned, USDA loans aren't awarded to borrowers with a specific minimum credit score. However, this platform has an automatic approval system that requires applicants to have at least 640 points. But this is the end of the road for you if your score is below 640.

If you have poor credit, the USDA can manually underwrite your loan application and determine if you qualify to borrow. But this option may require you to submit documents with your asset or income information.

What if you have no credit history? In that case, a lender can use several valid non-traditional tradelines, including utility bills, rent payments, monthly childcare, and school tuition receipts.

Top Things to Do in Levy County, Florida

Tour Cedar Key

Cedar Key is a gorgeous, historic city located in Levy County. Try this romantic town if you dream of living or visiting a place that exudes the "Old Florida" vibe.

And the best thing is, you can explore this city on foot! Picture trekking through a beautiful fishing village of some sorts, with charming seafood restaurants, a pier area, and a fantastic view of the Gulf of Mexico. Sounds fantastic! How amazing is that?

There's more: although Cedar Key is an infamous vacation spot, it's still largely undeveloped. That means less noise, traffic, crime, and other issues common in urban areas and metropolitans.

Visit Museums

If you love going through historical, cultural, scientific, and artistic artifacts, the museums in Levy County will stun you speechless. Not yet intrigued? Well, consider this: Levy County is home to nine top-tier museums.

The first museum you should visit when you become a Levy County resident is the Levy County Quilt Museum in Chiefland. Why? It is the only quilt museum in the Sunshine State! This place exhibits unique, prize-winning pieces you'll find nowhere else in the region.

Other Levy County museums you need to visit at least once include the Shell Mound Archaeological Site, Cedar Key Historical Society Museum, and Railroad Display- Gulf Hammock.

Go Kayaking

Why has Kayaking become a popular sport? First, it allows participants to interact with nature and enjoy life-changing sceneries. This watersport is also adventurous and exhilarating. So, if you are an adrenaline junky, Kayaking won't disappoint. Don't forget that, like other physical activities, Kayaking has countless health benefits.

If you are sold on Kayaking, you'll be glad to hear that Levy County has many exciting spots. These include the Wekiva River and Waccasassa Bay Preserve State Park. Buy a home in Levy County, find a favorite spot, and grab your gear! What do you have to do to enjoy all these places perpetually?

Swim and Fish

Levy County is home to some of the most beautiful beaches in the entire State of Florida. These include Bird Creek Beach. This small, natural beach is a favorite for tourists and locals. If you want to dip your toes in the water and sun bask, start here.

But Bird Creek Beach isn't the only spot in this county where you can swim. You may also enjoy the waters in Blue Spring County Park, Manatee Springs State Park, Fanning Springs State, and Blue Grotto, among many other places.

And if you love fishing, Levy County has plenty of fishing areas, ranging from Suwanee River and Lake Rousseau to Withlacoochee River and Tenmile Creek.

Watch Exotic Birds

Birding is fun, and it helps you connect with nature. Plus, it allows communities to understand birds and their needs and protect them if necessary. Most importantly, according to experts, bird watching boosts mental health.

If you are a birder or planning to become one, you'll find Levy County more than just entertaining. This area is a breeding ground for many bird species, including American Kestrels, Fish Crows, Red-Bellied Woodpeckers, and Vireos.

The Lower Suwannee National Wildlife Refuge is the best place to kickstart your birding adventure in Levy County. It's home to various outstanding bird species like the Barred Owls and Pileated Woodpeckers.

USDA Loan Application Process

If you want to apply for a USDA-guaranteed loan, and all eligibility signs point to yes, find an approved lender in Levy County from the Rural Development's list of active lenders. The lender will help you review eligibility, answer all relevant questions, and guide you through the application process.

On the other hand, if you want a direct USDA home loan, get state-specific forms and resources from the Rural Development factsheet and use them to apply.

Final Thoughts

Nothing should stop you from buying a home in Levy County and living here for the rest of your life, not low income or financial hurdles. Why? USDA has direct and guaranteed loans that can help you transition to homeownership.

If you meet the department's eligibility criteria, apply for a zero down payment loan today and enjoy all the perks of living in Levy County.

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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