BEST OF
8 Best USDA Mortgage Lenders in 2021
If you live in an eligible area and are interested in a USDA loan, we'll help you choose an approved lender for USDA financing.
If you’re planning to buy a home in a rural area or even a suburb, a USDA loan may be an option for you. The U.S. Department of Agriculture offers these zero-down-payment loans to home buyers who qualify. The property must be in an eligible area of the country, and borrowers must meet certain income requirements.
The USDA issues some loans itself and guarantees USDA loans offered through approved lenders, such as those listed below. NerdWallet has reviewed some of the best USDA mortgage lenders to help you decide which is the right lender for you.
If you’re planning to buy a home in a rural area or even a suburb, a USDA loan may be an option for you. The U.S. Department of Agriculture offers these zero-down-payment loans to home buyers who qualify. The property must be in an eligible area of the country, and borrowers must meet certain income requirements.
The USDA issues some loans itself and guarantees USDA loans offered through approved lenders, such as those listed below. NerdWallet has reviewed some of the best USDA mortgage lenders to help you decide which is the right lender for you.
| Lender | NerdWallet Rating | National / Regional | Minimum Credit Score | National / Regional | Learn More | |
|---|---|---|---|---|---|---|
 New American Funding: NMLS#6606 at New American Funding | Best for borrowers with weaker credit | National | 640 | National | at New American Funding | |
 Guaranteed Rate: NMLS#2611 at Guaranteed Rate | Best for USDA loans overall | National | 620 | National | at Guaranteed Rate | |
 Fairway Independent Mortgage: NMLS#2289 at Fairway Independent Mortgage | Best for customer service | National | 620 | National | at Fairway Independent Mortgage | |
 Carrington: NMLS#2600 | Best for borrowers with weaker credit | National | 550 | National | Read review | |
 SunTrust (Truist): NMLS#2915 | Best for USDA loans overall | National | 640 | National | Read review | |
 Alterra: NMLS#133739 | Best for customer service | Regional | N/A | Regional | Read review | |
 Wells Fargo: NMLS#399801 | Best for traditional lending experience | National | 620 | National | Read review | |
 PNC: NMLS#446303 | Best for traditional lending experience | National | 640 | National | Read review |
What's the difference between a USDA guaranteed loan and a USDA direct loan?
The U.S. Department of Agriculture offers two main types of USDA mortgages — guaranteed loans and direct loans.
USDA guaranteed loans are mortgages that are insured by the USDA, meaning if you were to default on the loan, the agency would repay your lender. This helps lenders make low- or no-down-payment loans to borrowers who may have lower credit scores or limited income.
You'll work with a USDA-approved lender to get a USDA guaranteed loan. In addition to the lenders listed here, you can also find a list of all approved lenders organized by state on the USDA website.
USDA direct loans come straight from the USDA rather than a mortgage lender. These home loans are for borrowers who are unable to qualify for a USDA guaranteed loan and whose income is below 80% of the median household income in their area.
To find out if you are eligible for a USDA direct loan, contact your state's USDA Rural Development Office.
Basic requirements for USDA guaranteed loans
There are several qualifications both you and the property you're hoping to buy will need to meet in order to be eligible for a USDA guaranteed home loan.
USDA mortgages are meant for lower-income borrowers, so your household income must be below 115% of the area's median household income. The income threshold is adjusted depending on how many people are in your household. The USDA lets you look up whether your income qualifies on its website.
Since the USDA's home loan programs are focused on revitalizing rural America, the property you're buying must be in a designated area. You can use the address lookup tool on the USDA's website to see whether the home you're interested in will qualify.
» MORE: Learn more about USDA loan requirements
More from NerdWallet
Last updated on March 15, 2021
Methodology
NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services each lender offers to consumers who are actively shopping for the best mortgage. The five key areas we evaluated include the variety of loan types and products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available Home Mortgage Disclosure Act data. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.
To recap our selections...
NerdWallet's Best USDA Mortgage Lenders in 2021
- New American Funding: Best for borrowers with weaker credit
- Guaranteed Rate: Best for USDA loans overall
- Fairway Independent Mortgage: Best for customer service
- Carrington: Best for borrowers with weaker credit
- SunTrust (Truist): Best for USDA loans overall
- Alterra: Best for customer service
- Wells Fargo: Best for traditional lending experience
- PNC: Best for traditional lending experience
Frequently asked questions
Not all lenders offer USDA financing. The USDA maintains a list of approved lenders for USDA loans, which includes online lenders and banks with branches nationwide, as well as small-town banks and credit unions. Apply for preapproval with more than one lender to be sure you're getting the best USDA loan rate.
To qualify for a USDA-guaranteed loan, the property you want to buy must be located in an eligible area. USDA loans also have maximum income limits based on where you live and how many people are in your household. If your income is too low for a USDA guaranteed loan, you may be able to qualify for a USDA direct loan.
USDA guaranteed loans don’t require a minimum down payment, but other requirements are highly specific. You must be unable to qualify for a conventional loan without private mortgage insurance. Your projected mortgage payment cannot be more than 29% of your monthly income. And though the USDA does not have a minimum credit score requirement, lenders may set their own guidelines.
To get approved for a USDA guaranteed loan, you'll have to reach out to a USDA-approved lender. You'll need to provide information about your income, assets and debts. You must be a U.S. citizen or permanent resident to be eligible for a USDA loan, so you may need to provide proof of that status as well.
