A USDA (United States Department of Agriculture) mortgage, also known as a USDA Rural Development Guaranteed Housing Loan, is a type of mortgage loan that is guaranteed by the USDA and is designed to help borrowers in rural areas purchase, repair, or refinance a home.

USDA mortgages are available to borrowers with low to moderate incomes and can provide a no-down-payment option for eligible borrowers. The loan amount is based on the appraised value of the home, and the interest rates on USDA mortgages can be fixed or adjustable.

One of the main benefits of a USDA mortgage is that it can provide affordable financing for borrowers in areas that are designated as rural by the USDA. To be eligible for a USDA mortgage, borrowers must meet certain income requirements based on the size of their household and the location of the property. The property must also meet certain requirements, including being located in an eligible rural area and meeting certain health and safety standards.

USDA mortgages do require borrowers to pay a one-time upfront fee, which is typically rolled into the loan amount, and an annual fee, which is paid in monthly installments. However, the fees are generally lower compared to other types of mortgages, and the fees may be waived for borrowers with lower incomes.

USDA mortgages are available from approved lenders, such as banks and mortgage companies, and borrowers can apply for the loan directly with the lender or through a USDA-approved mortgage broker. Borrowers should carefully review the terms and conditions of a USDA mortgage and work with a mortgage professional to determine whether it is the right option for their financial situation.