The US Department of Agriculture (USDA) was established in 1935 to bring electricity to rural areas during the Great Depression. Gradually its mission expanded to include a bunch of things, including extending credit for rural development.

Through the Single Family Housing Guarantee Loan program, the USDA acts as a loan guarantor for buyers of non-farm rural properties. The property must be in an eligible area, residential in nature and may not have income-producing potential.

Applicants must have a household income of no more than 115% of area median income and meet fairly conservative debt-to-income ratio requirements. USDA loans require an acceptable credit history, but can be generous about a less-than-perfect credit history. Loan guarantee fees are required, but are much lower than the FHA mortgage insurance costs. Qualified buyers are not required to make a down payment and guidelines allow the seller to contribute toward closing costs. USDA loans can close with very little (to no) cash from the buyer.

Income and maps of eligible areas are available on the USDA’s loan eligibility site.