What Are the USDA Eligible Areas in Texas?

What Are the USDA Eligible Areas in Texas?

The United States Department of Agriculture (USDA) designates eligible rural areas for homebuyers seeking USDA loans, typically areas with populations under 35,000.

Find out if you qualify for a USDA loan with this quick guide, which outlines fully eligible areas, loan requirements, and helpful tips for a smooth application process.

USDA Eligible Areas in Texas

Here’s a list of fully eligible locations for USDA financing in Texas:

Verify your address on the USDA Property Eligibility Map page to confirm it’s in an eligible county. The USDA website shows every eligible area for different states and loan programs, including Single Family Housing Guaranteed, Single Family Housing Direct, and Multifamily Housing loans.

Requirements for Getting a Texas USDA Loan

USDA loans are designed for borrowers with low-to-moderate income, allowing them to buy homes with below-market mortgage rates, lower mortgage insurance, and no down payment.

They are government-backed loans intended to make homeownership more affordable and promote rural development, especially for first-time homebuyers who may not qualify for conventional or FHA loans with higher interest rates.

John and Kathleen Crandell, a retired couple living in a mobile home trailer without proper heating, never thought they could afford a house on their small pension. 

But after discovering they qualified for a USDA loan, they purchased their first home, a quaint house in a quiet Palestine, Texas neighborhood. 

The process was simple, and the closing took place on their 50th wedding anniversary, making it one they’ll never forget.

USDA loans are not just for purchasing homes. You may also use the funds to build, repair, improve, or relocate a home.

Here are the basic eligibility requirements for USDA-guaranteed loans:

Income and Credit Score Requirements

• Your household income falls within the USDA income limits in Texas.
• Your debt-to-income (DTI) ratio isn’t higher than 41% of your monthly income.
• You meet your lender’s specific requirements. Most lenders require a 620 minimum credit score. Some lenders accept lower credit scores if applicants have a low DTI ratio or significant savings, demonstrating a strong ability to repay the loan.
• Your monthly mortgage payment must be less than 29% of your total income.

Property Eligibility Requirements

• Located in an eligible rural area
• Must be your primary residence instead of an income-earning property
• Must be safe, sanitary, and structurally sound with dependable heating, cooling, electrical, plumbing, roofing, and road access
• Must have a market value within the area loan limits

Once you’ve submitted your loan application, your USDA-approved lender will have an appraiser evaluate the property’s value and condition to confirm it meets program standards.

Key Takeaway: USDA loans provide an affordable path to homeownership for low-to-moderate income borrowers. When you satisfy income, credit, and property requirements, you can obtain government-backed financing without the cash-down burden.

Quick Tips to Streamline Your Application

Before applying for a Texas USDA loan, keep these tips in mind to get the best loan terms:

• Maintain a favorable credit score by paying off current debts, avoiding new credit, and reducing your debt-to-income ratio. Having too many outstanding loans could make you ineligible.
• Report an accurate household income to ensure you qualify.
• Gather all essential financial documents early, including bank statements, tax returns, W-2s, and pay stubs.
• Compare the rates and fees of different USDA-approved lenders to find the most favorable option for you.
• Choose the best mortgage lenders experienced in originating and servicing USDA loans for fast approval.

Get Expert Help From a USDA Loan Specialist

After checking USDA eligible areas in Texas, find a trusted USDA loan specialist to make your homebuying journey easier.

At Texas United Mortgage, our mortgage experts understand exactly what it takes to secure your loan. We’ll guide you through the application process from pre-approval to closing.

Have questions about USDA loans in Texas? Contact us today and we’ll be happy to help!