United States Department of Agricultural (USDA) loans are government backed mortgage loan products aimed to assist low income borrowers purchasing a home in a designated rural area.

Similar to a VA Loan, a USDA loan does not require any down payment. The USDA program allows for low credit borrowers to purchase a single family primary residence. With a USDA loan, you can roll your closing costs until the loan balance, to really keep your out of pocket expenses very low.

One of the downsides to the USDA loan is the required 1% fee that must be paid to the USDA in order to continue to fund the program. The 1% fee can be rolled into the loan amount or paid at closing. The USDA also requires a yearly fee of 0.35% of your loan amount, which is divided by 12, and included in your monthly payment.