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

Want to buy your dream home but do not have enough savings to cover upfront payments? Worry not, because zero down payment USDA loans could be all you need to own a home. If you are used to mortgage programs requiring down payment, USDA loans are an exception. Keep reading to learn how to obtain this loan and use it to buy a home in Volusia County, FL.

What are USDA Loans?

A USDA loan is a zero-down payment, a low-interest loan backed by the government through the U.S. Department of Agriculture.

These loans are available for eligible U.S. citizens and residents who want to buy their first homes in rural or suburban areas. Repeat buyers may also qualify for this loan, but this isn't always a guarantee.

USDA loans are meant for borrowers with low to moderate income; hence the household income limit is 115% of the Area Median Income (AMI).

The loans are funded by USDA-approved lenders and are only guaranteed by USDA in case of default. We have rounded up the several qualification requirements below.

Who Qualifies for USDA Loans?

USDA loans come with some qualification requirements that borrowers must satisfy. Some key eligibility factors emphasize having a stable and dependable income and the ability to prove creditworthiness. Below are the eligibility requirements for USDA loans.

Credit Requirements

The USDA doesn't have a minimum credit requirement, but most lenders have set the FICO score at 640. But a credit score isn't the only factor determining your creditworthiness. More often, the other essential aspects are your loan repayment patterns, length of credit history, and credit utilization.

You may still be eligible for USDA loans if you have a credit score below 640 but significant savings or/and a steady income source. You can also try as many lenders as possible to compare credit score requirements; chances are, you may find a lender with the least credit score requirement and competitive interest rates.

Income Requirements

USDA targets borrowers who have low to medium income. So at a minimum, your source of income should be stable and reliable. Lenders often verify income by reviewing the income tax returns and pay stubs for the last two years. Some of the income types the lenders will be interested in include:

  • Qualifying income - The goal is to ensure the borrower can comfortably repay the loan.

  • USDA eligibility income - This household income determines the borrower's eligibility for USDA loans. The income includes basic salary, commission, overtime, and income from dependent children and relatives living in the household.

  • Adjusted annual household income - This is the total household income, minus childcare expenses and medical expenses.

Loan and Income Limits

Most residential neighborhoods in Volusia County, FL, fall within the general income limit set by the USDA. The general income limit for USDA loans is $103,500 for 1-4 member households and $136,600 for 5-8 member households. But since the income limits vary by location and household size, the USDA also has an income limit that's set at 115% of the AMI. If you have any doubts, consult your lender before making any commitments.

Debt-to-Income Ratio

Your debt-to-income ratio or DTI tells the lender more about your ability to repay the loan. It's a ratio of your expenses to income. The lender often wants to ensure you can repay the loan while meeting your financial obligations. A DTI of 41% is the standard limit for most lenders, but this isn't a fixed figure.

If you have a higher DTI, say 50%, but have an excellent credit score, significant savings, and a dependable income source, you may still qualify for a USDA loan. Sometimes, you may need to repay some of your debt or/and increase your income sources to lower the DTI before being eligible for USDA loans.

Location Requirements

USDA loans help borrowers buy properties in rural and suburban areas. So, by default, not all properties will be eligible for financing. The USDA defines rural areas as parts of an open country with limited buildings and no advanced infrastructures. Most areas with a population of 10,000 and a max of 35,000 may also qualify as suburban areas, provided they are not labeled Metropolitan Statistical Areas (MSAs).

Always double-check with your lender before picking a home in any location within Volusia County. Luckily, most residential neighborhoods in the U.S. (roughly 97%) fall within the USDA classification of rural and suburban areas.

Property Requirements

Besides the location requirements, the property you choose must meet USDA guidelines. First, USDA loans only fund primary residential homes, so you cannot finance an investment property with this program. Similarly, only single-unit properties are eligible. That means you cannot buy a multi-family property with a USDA loan. Below are the other requirements:

  • The property should have convenient access to a road, driveway, or street.

  • The home must have an adequate water supply, sewage system, reliable power, and other essential utilities.

  • The property should be more than 400 square feet but less than 2,000 square feet.

Besides meeting these requirements, the property must also pass the USDA appraisal. Other eligible property types include modular/manufactured homes, condos or townhouses, upper-fixers, and new construction homes.

How to Obtain USDA Loans in Volusia County

Now that you know the USDA loan eligibility requirements, let's see how you can apply for these loans and secure your dream home in Volusia County, FL. We have broken down the loan application process into seven main steps. These are:


The most critical step when applying for a USDA loan is to find a USDA-approved lender and apply for pre-qualification. This involves quick credit checks and income review to ensure you meet the most basic requirements. Before requesting a pre-qualification service, ensure the figures are correct to minimize errors and inconsistencies.


If you get pre-approved, the lender will issue a certificate of approval. Unlike pre-qualification, pre-approval is more official and often involves a more profound credit and income evaluation. Your lender will request your income documentation, such as pay stubs, bank statements, and W-2s. The other aspect that the lender will look at is your debt-to-income ratio. All these should fall within the USDA eligibility guidelines to help minimize the risk of loan default.

House Hunting

The next step is a hunting mission where you will find the best homes in Volusia County that falls within the location and property requirements stipulated by USDA. Most sellers will love to see your certificate of approval to ensure you are a serious buyer. Ideally, the best time to go house hunting is low housing demand. That means you'll have many options to choose from, plus the seller will be more willing to negotiate prices and even reach an agreement on who pays the closing fees. To benefit the most, you want to work with an expert and dedicated real estate agent who will guide you through home selection and price negotiation.

Signing a Purchase Agreement

Once you have reached an agreement with a seller, you need to spell out all the agreed-upon terms before engaging in any transaction. Signing a purchase agreement puts you and the seller under contract and details the conditions under which the home sale will occur. Your real estate agent will be the most qualified person to oversee the purchase agreement signing. That way, they will ensure the contract is solid and binding and that all the parties involved have signed.


USDA loan underwriting takes two approval steps; one by your lender and the other by USDA. That means the underwriting process will be slightly longer. During underwriting, your loan application documents are scrutinized to ensure they are legitimate and trustworthy. Any inconsistencies may raise eyebrows and could have your loan application denied. In most cases, however, either or both the lender and the USDA will request more information whenever they need further clarification.

Final Approval

This is a final commitment or a clear-to-close sign you'll get from USDA and your lender. The final approval only occurs after your application passes the underwriting process. Ideally, it takes up to a week or so for USDA to issue the final approval and send your loan file back to the lender for closing.


This is the last step in the home financing and buying process where you and the seller sign the necessary documentation. Your agent will help you navigate the whole process and to understand any terms you may not be familiar with. After signing the mortgage loan documents, you assume property ownership and become responsible for the mortgage.

Beautiful Single Family Home in Florida

Benefits of USDA Loans

As you already know, USDA loans come with several benefits. We have highlighted the main advantages of using this load product below.

Zero Down Payment

Not having to save up for a down payment for your mortgage is quite a relief. For most loans, for example, the FHA has a minimum down payment of 3.5%, while conventional loans have a minimum of 3%. For a mortgage of $300,000, you would need to raise $9,000 to $10,500 upfront to be considered for a loan. This makes a lot of difference for low to medium-income borrowers. However, the zero down payment option doesn't mean you aren't allowed to make an upfront payment, i.e., if you have some extra cash.

Relatively Low-interest Rates

USDA loans are highly subsidized compared to the market rates since the USDA guarantees them. These rates do not vary based on the credit score or whether a borrower chooses to make a down payment. For conventional loans, how much you pay in interest often varies based on the market conditions and your credit score.

Low Monthly Mortgage Insurance Premium

Mortgage insurance is usually required for any loan product whose down payment is less than 20% of the loan amount. This applies to all mortgage products, including USDA loans. The benefit of USDA loans is that the lender is expected to charge a strict 1% upfront and 0.35% annual fee in monthly installments.

USDA's insurance fee is called mortgage insurance premium (MIP) and shouldn't be confused with private mortgage insurance (PMI) for conventional and FHA loans. And while mortgage insurance premium is paid throughout the loan lifetime, it's still relatively cheaper than private mortgage insurance, which stops after you've built a 20% equity in your home.

Flexible Credit Requirements

Unlike most mortgages, USDA has some flexible credit guidelines that allow most borrowers, even those with poor credit scores, to try their luck with homeownership. Similarly, those with non-traditional credit or no credit history may still qualify if they prove they can repay debts.

Closing Cost Assistance

Most lenders charge a closing fee for every approved loan. This fee often ranges from 2- 6% of the purchase price. Depending on the cost of the property, this can run into thousands or tens of thousands. Luckily, USDA loans allow closing cost assistance through gift money, closing cost assistance programs, or seller concessions.

Top 5 Outdoor Fun Activities in Volusia County, Florida

Now that you know how USDA loans work and how you can obtain one, let's see what this county has to offer. Located on Central Florida's east coast and less than 50 miles off the Atlantic Ocean, Volusia County is home to nearly 550,000 people as per the 2020 census. This Florida County is all about quality living, thanks to welcoming locals and many fun outdoor activities. Below are the five outdoor fun activities you can enjoy in Volusia County, Fl.


Volusia County is home to various state parks, county parks, nature refuges, and numerous hiking trails. Over the years, it has become a top destination for hikers and tourists looking to take in Florida's natural beauty. This wonderful county will keep you busy throughout the year if you love hiking.

Some of the best hiking trails include Tiger Bay State Forest, which spans more than 23,000 acres and offers more than 20 miles of interpretive and multipurpose trails, accessible from 4 different trailheads. Another breathtaking hiking spot is the Long Leaf Pine Preserve which is a 12,000-acre spot and has four paths, Flatwoods, strands of cypress trees, pure air, and more.

Enjoy a Fun Time in the Springs

Volusia County is home to many beautiful springs, including The Blue Spring, the largest and most popular spring along St John's River. Blue spring's inviting 73-degree Fahrenheit water is perfect for swimming, scuba diving, and snorkeling. Other fun activities include kayaking, boating, and fishing. You can also explore other springs, such as the Green Springs and DeLeon Springs, which are perfect for kids and adults.

Beach Driving and Parking

Volusia County has a rich beach driving history, especially with the renowned Daytona and New Smyrna Beach. While driving on the beach, you must adhere to the speed limits and stay in your lane. Additionally, watch for any wildlife, sunbathers, and passersby. Parking is permitted on the beach to the east (seaward) of the protected area.


If you enjoy spending time in the waters, you will find several top-notch kayaking locations in Volusia County. One of the best kayaking spots is the Hontoon Dead River Paddling Trail, where you can spend a leisurely day paddling around the water. Another great spot is the Blue Spring State Park, where you'll enjoy views of beautiful plant life and exotic animals. If you are a beginner kayaker and would love to be in a company of professionals, the Kayak Atlantic Waters is the place to be.

Explore Marine Life

The Atlantic coastline of Volusia County provides valuable habitat for a wide range of marine life. During your free time, explore the shoreline as you enjoy the views of the Intracoastal Waterway and beaches. In your adventure, you might see Atlantic Bottlenose Dolphins, Florida Manatees, or Green Sea Turtles somewhere in the estuary. These species are categorized as threatened or endangered and are well protected by state and federal regulations. The ocean is also home to dolphins, whales, and sea turtles. Most of these marine mammals are often present all year long, so there are high chances of spotting them any time of the year.

Bottom Line

Volusia County is an excellent spot for anyone looking for a fun and budget-friendly place to call home. The house prices in this county are relatively fair, plus you can apply for a USDA loan to make owning a home even more affordable. Get pre-approved today and buy your dream home in any beautiful, activity-filled residential neighborhood in Volusia County, FL.

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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