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

What isn't there to love about Sarasota County in Florida? This county is home to the fabled Ringling Museum of Art and every nature lover's dream come true. Sarasota also boasts diverse artist communities, pristine beaches, botanical gardens, and wildlife habitats and sanctuaries.

So, why aren't you a Sarasota County resident yet? If the main reason is your income isn't enough to support purchasing property in this area, have you considered using USDA loans to turn your homeownership vision into a reality?

You're likely wondering what USDA loans are and if you, too, can get them. This piece will explain everything you need to know about these solutions in a short while. Let's dive in!

USDA Loans 101

Living in a rural area has its fair share of perks. First and foremost, properties are often more affordable here than in urban areas. That means the chances are high that you'll pay less for a home in a rural setting than a similar-sized house in a metropolitan area.

With that in mind, although homes are considerably cheaper in rural regions, they're not free. Buyers must pay a considerable sum to own property in these areas. Unfortunately, that is often a problem for many prospective buyers with moderate, low, or meager incomes.

Does that mean such people will never transition to homeownership, a vital part of the American Dream? Not necessarily.

Today, the United States Department of Agriculture (USDA) is helping countless individuals afford sanitary, safe, modest, and decent housing in eligible rural locations all over Florida, including Sarasota County.

Simply put, USDA loans are for Americans that don't earn enough to afford to purchase property or can't qualify for conventional mortgages because they have poor credit. These loans are popular today for one outstanding reason: they have NO DOWN PAYMENTS. Couple that with competitive interest rates and low insurance fees, and you get a sweet deal.

But we are getting ahead of ourselves. Before you toast to this godsend solution, you must understand the available options.

Types of USDA Loans

Three USDA loans are available for homebuyers today: Guaranteed, direct, and home improvement loans.

USDA-Guaranteed loans

As the name suggests, USDA-guaranteed loans are backed by the USDA Rural Development. So, who provides them? The USDA leaves that to approved private lenders.

The Single-Family Housing Guaranteed program helps certified lenders provide 100% financing to low-and-moderate-income borrowers with zero money down. In return, the USDA Rural Development provides the lenders with a 90% loan note guarantee, covering them against losses from loan defaults.

Any eligible borrower can use a USDA-guaranteed loan to buy an existing house and cover any other relevant costs, including rehabilitation, improvement, and relocation expenses. You can also use the funding to build a new if need be.

However, this loan is only for applicants willing to use the home in context as a primary residence as opposed to a second home, income house, or vacation property. In addition, eligible applicants must have a household income that is not more than 115% of their area's median household income.

Note that you can only get a guaranteed loan if the property is in an eligible rural area. Moreover, this program doesn't have a mandated maximum purchase price or acreage limit, and your loan amount is dependent on your repayment ability.

What about interest rates? You and your lender can discuss this aspect and set agreeable terms, but it must be a 30-year fixed rate.

Direct home loans

Direct home loans are under the Section 502 Direct Loan Program. They are distinctly different from guaranteed loans in one primary way: no other lenders are involved besides the USDA. That means the agency itself funds borrowers.

These loans are primarily tailored for low-and-very-low income households. If you are in this category, you can use the Section 502 Direct Loan Program to afford a modest, sanitary, decent home in an eligible rural area.

Before you run out and apply for this loan, are you eligible? If you're unsure, carefully review the USDA requirements beforehand.

Direct loans are for applicants lacking decent, sanitary, and safe housing. These individuals must also prove that obtaining a loan from other programs and lenders isn't possible because they can't meet set terms and conditions.

Moreover, like USDA-guaranteed loans, a direct home loan is for an applicant willing to use the property as their principal residence. If that is your intention, and you are allowed to participate in federal programs, nothing should stop you.

Home improvement loans

If you are in the low-and-very-low-income categories, your worries likely extend far beyond buying a decent home. Why? The house itself will wear and deteriorate over time. And to make matters worse, problems like damaged HVAC systems often crop up when least expected.

How can you afford expensive projects like foundation repairs on a mediocre salary? It's nigh impossible. But not all is lost. The USDA has a program that can help you repair, renovate, or modernize your home: the Section 504 Home Repair Program.

This program offers home improvement loans to eligible participants. But to qualify, an applicant must occupy and own particular home. They must also be unable to get funding elsewhere. Home improvement also grants seniors (at least 62 years) who can't afford to repay repair loans.

Reasons to Apply for a USDA Loans

By now, USDA loans sound enticing. But that isn't enough. You need to know what makes them outstanding and worth going for. Below is a breakdown of all the right reasons to apply for a USDA loan.

No down payments

Suppose you plan to buy a house valued at $100,000. In that case, preparing to pay around 6% of that amount ($6,000) is a prerequisite with most mortgage loan options available today. Why? Simple. Most traditional lenders require you to put down that amount. But USDA doesn't.

USDA mortgage loans require zero down payment. That is excellent news for low-income individuals that can't meet high down payment requirements or any for that matter. And if you can, what better way to avoid draining your finances than buying property without a down payment?

No cash reserves

An emergency like getting laid off can be devastating and change your life for the worst. But, "rainy day" savings may help you cushion the impact and survive until you find a solution. Most lenders keep this in mind and require borrowers to have cash reserves.

Typically, most programs only fund applicants with mortgage reserves that equal two months of mortgage payments, and If you don't have such resources at hand, too bad.

But if your income and finances don't make meeting cash reserve requirements possible, don't fret. You may not need mortgage reserves if you are eligible for USDA loans.

Seller concessions

Did you know that a seller can help you cover closing costs? This aspect is known as seller concessions. Most existing homeowners use it to make their properties more attractive to prospective buyers.

Seller concessions can be beneficial to low-and-moderate-income homebuyers that lack enough cash at hand to clear closing costs. If this describes your case, you'll be thrilled to know that seller concessions are allowed by the USDA.

If you use a USDA loan to buy a home in an eligible area, the seller can contribute concessions equal to or less than 6% of the total loan amount. You, the buyer, can use these concessions to cover insurance costs and prepaid taxes, among other expenses.

Reasonable interest rates

As of June 1, 2022, the USDA's interest rate for direct loans was 3.00%. That is considerably lower than the average rate in the US, which is around 6%. And the lower the rates, the more spending money you get.

Moreover, for guaranteed loans, borrowers can negotiate with active lenders. That means you can bargain for lower interest rates and get a reasonable deal.

Beautiful entrance to a luxurious house in Florida

Who is Eligible for USDA Loans in Sarasota County, Florida?

Eligibility for USDA loans in Sarasota County depends on the following factors:

Household income

The USDA has set household income limits that eligible applicants must not exceed. These vary depending on location and the number of household members in a particular family.

The adjusted income limits for a household with 1-4 individuals in Sarasota county are $43,150, $69,050, and $103,500 for very-low-income, low-income, and moderate-income guarantee loans, respectively. If your household has 4+ members, the limits change to $57,000, $91,150, and $136,600 for very-low-income, low-income, and moderate-income guarantee loans, respectively.

You can check out the USDA-guaranteed loan income limit requirements from the agency's comprehensive list.

Direct USDA loans also rely on similar income limit requirements as USDA-guaranteed options. However, the former has two additional categories: grant income and a 38-year term. Check out the USDA Rural Development's income limit list for direct loans for more info.

Property location

We have already established that USDA loans are for properties in eligible rural areas. However, you must note that these programs have different definitions of "rural." So, forget what you know for now and pay attention.

According to the Rural Development guidelines, a rural area is an open country or any place, city, village, or town that isn't associated with or part of an urban area. But that isn't all.

The USDA also requires rural areas to have 2,500 or fewer residents. There are a few exceptions to this rule. A region with 2,501-10,000 residents can still qualify if it is rural. The same applies to locations with 10,001-20,000 residents not contained within MSAs (Metropolitan Statistical Areas), which seriously lack mortgage options for low-and-moderate-income families.

Lastly, if you plan to buy property in an area with 10,001-35000, you may be eligible if that region was classified as a rural area before October 1, 1990. That is so even if data from or after 2020, 2010, 2000, and 1990 decennial censuses determined the area unfit to be "rural."

If you need detailed info, go through the USDA Rural Development's property requirements file.

Credit score

The USDA hasn't set a minimum credit score for all applicants. But, if you want to apply for a USDA-guaranteed loan, you must deal with approved lenders, and most require borrowers to have a minimum of 640 points. Since most consumers' credit scores are 600-750, 640 is a reasonable number.

However, there's still hope if your credit score is below 640. Why?

Although USDA has an automatic underwriting system that's solely for applicants with a credit score of not less than 640, you can bypass this rule through manual underwriting. That means the USDA will use an actual underwriter to review your finances and decide if you are eligible for a loan.

Why is Living in Sarasota County a Splendid Idea?

If you are second-guessing living in Sarasota County, stop! The reason is that dwelling in Sarasota County allows you to enjoy the following activities:


Some of the most exciting and awe-inspiring attractions, sceneries, and landmarks in the Sunshine State are in Sarasota County.

This area has countless must-see aquariums, museums, wildlife sanctuaries, botanical gardens, and state parks. Not to forget note-worthy landmarks like the Ed Smith Stadium, Sarasota Opera, and the Legacy Trail, to mention a few.

What better way to explore all these than as a resident? You can go sightseeing alone or join the tourists that often flock to this county and leave with memories worth cherishing for a lifetime, without paying for a plane ticket!


Do you love beaches? In that case, living in Sarasota County is definitely worth your while. This region has many fantastic beaches, the topmost being Lido Key Beach, a borderline mystical, pristine spot that tourists and locals adore.

Sarasota County is also home to these famous beaches: Siesta Key Beach, Sarasota Beach, and Point of Rocks Beach.

Most beaches in Sarasota County have clear water filled with marine life. Do these qualities bring any activity to mind, say snorkeling? If yes, once you start living in Sarasota County, all you'll have to do is pack your gear, locate the nearest beach, and have tons of fun!


Kayaking has many physical and mental benefits. This water sport can help you manage weight, increase upper-body & core strength, improve cardiac health, and bolster endurance. Plus, you may use it to boost your mood, improve focus, enhance memory, and improve sleep quality.

The critical question is, can you enjoy all these benefits of kayaking when you buy a home in Sarasota County? Yes.

Sarasota has numerous water access locations. These include 25+ non-motorized launches that support various watercraft, including kayaks.

When you become a Sarasota County resident, try kayaking in Bayfront Park, Blackburn Point Park, Christopher Wheel Park, Lakeview Park, or Curry Creek Preserve. These have the amenities you need to have a delightful, life-changing experience.

Mountain biking

These three bike trails- Boldlygo, Carlton Preserve, The Celery Fields, and Oscar Scherer State Park- are among the best in the entire Florida State. Where are they located? That's right, Sarasota County. What does this have to do with anything, you may ask?

Mountain biking is a physical activity that helps you improve various aspects of your wellbeing, including heart health, brain power, and sleep quality. But you can't enjoy mountain biking without challenging, top-tier trails. There you go.

If you buy a home in Sarasota County today, many thrilling mountain bike trails will be at your disposal. And you can use these to make your existence a lifelong adventure.

Cultural events

One of the best ways to experience a particular culture is by attending cultural festivals. These are usually highly affordable or free-for-all. And most can be right outside your doorstep, provided you live in an area like Sarasota County.

Sarasota hosts various cultural festivals, including the Sarasota Shell Shore, Sarasota Medieval Fair, and the infamous Sarasota Oktoberfest. These provide residents and visitors with uncapped fun, cultural immersion opportunities, and an assortment of authentic delicacies.

If all this tickles your fancy, buying a home in Sarasota County may be the best thing you'll ever do in your lifetime.

What's Next?

Now that you know all there is to know about USDA loans and why living in Sarasota County is a good idea, the only thing left is kickstarting the entire process. You can start by checking if you are eligible for a USDA loan and submitting your applications to the relevant lenders and platforms.

Most importantly, if you have never visited Sarasota County, make plans and do it soon. Experiencing the region and its people firsthand is the best way to determine if it's a good fit for your household.

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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