Assuming you want to buy in either a rural or suburban area, and you meet the income limits, here are some things to consider when choosing a USDA loan over a FHA loan, conventional loan, or VA loan.
USDA Loan vs. FHA Loan
The interest rate is normally .5% higher for an FHA loan. USDA loans also come with 100% financing, meaning you don’t have to make a down payment. FHA loans require 3.5% for credit scores 580 and above and 10% for scores 500-579.
USDA Loan vs. Conventional Loan
The USDA loan requires a higher credit score of 640, but that does not mean you can’t get a USDA loan if it’s lower. Conventional loans usually require a credit score of 620, but that depends on the lender.
USDA Loan vs. VA Loan
For a VA loan, you must have served in the U.S. military. Both offer zero down payment options. However, with VA loans, there aren’t any income limitations nor are there purchase area restrictions.