USDA Income Limits for Home Loans
Welcome to the USDA Income Limits page. Probably one of the most important pages, because, as a homebuyer, you must be under the county income limit to qualify for a USDA Guaranteed Loan.
The USDA Guaranteed Single Family Housing Program was designed to assist homebuyers, with moderate or low income, to purchase a home with No Money Down in rural and semi-rural areas. For this reason, homebuyers are required to be under the income limit for the county they are looking to purchase in.
Limits vary by location and household size, and the program is generally available to homebuyers whose household makes no more than 115% of the median income for the area where the property is located.
How are USDA Loan Income Limits Determined?
Before you try and calculate the income limits yourself, the official median income for all parts of the United States is tallied by the United States Census Bureau and is also reported by USDA Rural Development. Finding the median income is relatively easy; however, knowing how to count qualifying income can be difficult. Sometimes borrowers, and even inexperienced USDA lenders, miscalculate income and deem themselves ineligible for a USDA loan, when in fact they may be eligible.
Additionally, there are adjustments for the number of those living in the property. USDA income limits are different for a home with 1-4 occupants then a home with 5+ residents.
For a family of 1-4 members, the income limit for most areas is $90,300, and can go up to $180,200 in high cost cities. The greater number of household members increases the income limit for that family.
In 2018 USDA increased the income limit for many counties across the United States. So, just because the limit is $90,300 for one county, may not be the limit for the county you are looking to purchase in.
If you are over the income limit and want to see if you qualify for deductions to lower your total gross household income, please fill out our form and a USDA specialist will assist you in calculating income and deductions as well as loan rates.
USDA Income Eligibility Calculation
All who will be living in the property over the age of 18, and working, will be included in the gross median income calculation. Even those who aren’t officially on the loan application. Family members’ income will be counted towards gross household income limit however, their income will not be used for the loan.
If a spouse is not working, USDA will request a letter from the spouse stating they are not currently working. If a dependent is enrolled in college full time and is not working, they can also provide a letter stating they are not currently working.
The 115% qualifier is an easy way to make a quick determination, but it’s important to understand there are many intricacies involved in counting income.
When determining income, it is best to speak with a USDA loan specialist. USDA loan specialists know how to properly count your income and determine if you qualify. You’ll be asked to provide your most recent pay check stubs, W2s and your income tax returns if you’re self-employed or receive income from sources other than your job.
What Income is Included in Gross Household Income Calculation?
- W2 income
- 1099 income
- Housing allowance
- Self-employment income
- Farming income
What is NOT Included in Household Income Calculation?
- Income earned from a dependent under the age of 18
- Section 8 housing assistance
- Income from live in nurse or live in aids
- Future non-documented income