The USDA loan is similar to the FHA in some ways. It is insured by a government agency, but not the Federal Housing Administration….(or the department of Veterans Affairs). The USDA loan is insured by the US department of Agriculture!

There are some major limitations to the USDA loan program, the main one being location restrictions. You can only use this loan program in USDA approved rural areas. But if you are up for that rural lifestyle, and buying a home with some space appeals to you- the USDA program allows for financing with NO down payment.

The USDA program also has an upfront funding fee. The USDA loan program has some other credit restrictions, as well as county specific income limitations + a residual income qualifying component.