USDA “Guaranteed” Home Loan or the USDA “Direct” Home Loan - what is the difference?

Mortgage and Lending with USDA / FHA Mortgage Source

Since 2008 most 100% financing mortgage programs here in Florida have all but been eliminated. USDA is the only remaining 100% home loan for civilians. USDA does have two different programs - the " USDA Direct" and "USDA Guaranteed" program. So what is the difference between the two, and what option is best for you?

Both USDA programs allow prospective home buyers in qualifying areas to purchase a home with NO down payment and without the additional expense of monthly mortgage insurance.  In most cases, the USDA Rural Home Loan is the least expensive loan to obtain and to maintain.

Key differences -   

USDA Guaranteed  Home Loan -  This is the most popular option.  It allows prospective home buyers to purchase in a rural designated area and has a higher income limitation than the USDA Direct loan.  It allows for buyers to have a qualifying income of up to 115% of the area median household income.  Income is the key difference.

USDA Direct Loan -  Not as common as the Guaranteed USDA Rural Home Loan.  The main reason is that they carry very strict income limitations for qualifying applicants.  You must have a very low income (80% of the area median household income) in order to qualify.  Applicants also must be without adequate housing and be able to afford the housing payment (including taxes and insurance) which can be up to 26% of the applicant's monthly income.

If you are a low income family interested in applying for the USDA Direct loan, you can get more information from the USDA here

To get more information or to apply for a USDA Guaranteed Home Loan, please click here to get started.

Need a USDA home loan pre approval ? Please contact us at

USDA Mortgage Source is Florida's leading resource for all 100% USDA / Rural Development home loans. Tallahassee, Jacksonville, Orlando, Tampa and everywhere in between - please visit our main web site at or call 904.302.6060 to learn more about the benefits of 100% USDA / Rural Development home loans here in Florida. We are available to serve you seven days a week.



Servicing the following Florida cities and counties:   Apopka | Aventura | Boca Raton | Bradenton | Brandon | Cape Coral | Clearwater | Clermont |Cocoa Beach | Coconut Creek | Coral Gables | Crestview | Crystal River | Daytona Beach | DeLand | Deltona | Delray Beach | Destin | Dunedin | Englewood | Fernandina | Flagler Beach | Fort Lauderdale | Fort Myers | Fort Pierce | Fort Walton Beach | Gainesville | Green Cove Springs | Hallandale | Hobe Sound | Hollywood | Homestead | Inverness | Jacksonville | Lakeland | Lake City | Lake Mary | Live Oak | MacClenny |Melbourne | Miami | Milton | Mount Dora | Naples | Ocala | Ocoee |Ojus | Orange Park | Orlando | Ormond Beach | Palatka| Palm Bay | Panama City | Pensacola | Pompano Beach | Port Charlotte | Port St. Lucie | Punta Gorda | Santa Rosa | Sarasota | Siesta Key | Springhill | St. Augustine | St. Petersburg | Sunny Isles | Tallahassee | Tamarac | Tampa | Titusville | Venice | Vero Beach | Weeki Wachee | Wesley Chapel | West Palm Beach | Winter Garden | Winter Haven | Winter Park | Winter Springs | Zephyrhills | Florida | Fla |FL


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Jamie Chambers

USDA /FHA Mortgage Source
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