USDA Home Loans for Rural and Small-Town Texas
The USDA Rural Development Guaranteed Loan program provides 100% financing for eligible homes in qualifying rural and suburban areas of Texas. There is no down payment requirement, and mortgage insurance costs are lower than FHA, making it one of the most affordable paths to homeownership available for buyers in the right locations.
Despite the name, USDA-eligible areas in Texas include far more than farmland. Many communities in the Hill Country, towns outside the major metros, and suburbs that have not yet crossed the USDA population threshold qualify. If you are looking at a home in or around Boerne, New Braunfels, Marble Falls, Kerrville, or dozens of similar Texas communities, a USDA loan may be on the table.
Is a USDA loan right for you?
- Buyers purchasing in a USDA-eligible area who want 100% financing without the down payment requirement.
- Buyers with moderate income who meet USDA household income limits, which vary by county and household size.
- Buyers looking at smaller Texas towns, Hill Country communities, or outer suburban areas that fall within eligible zones.
- Buyers comparing USDA to FHA who want lower long-term mortgage insurance costs and have an eligible property and location.
How USDA loans work in Texas
Texas's geographic diversity makes it one of the most interesting USDA states in the country. While the dense urban cores of Houston, Dallas, San Antonio, and Austin are generally ineligible, the eligible map expands considerably in the surrounding counties and communities. The Hill Country corridor, including communities in Kendall, Gillespie, Blanco, and Kerr counties, has significant USDA-eligible zones. Buyers looking at Boerne, Bandera, Fredericksburg, and nearby areas often qualify.
New Braunfels, one of the fastest-growing cities in Texas, occupies an interesting position, with some areas within city limits no longer qualifying while surrounding Comal County communities may still be eligible. Eligibility is property-specific and can change as the USDA updates its maps, so we check the actual property address rather than estimating by city name.
USDA loans carry two forms of guarantee fees instead of traditional mortgage insurance: an upfront guarantee fee (currently 1% of the loan amount) and an annual fee (currently 0.35% of the outstanding balance, paid monthly). Both are significantly lower than FHA MIP for most borrowers, which is one of the reasons USDA can be more affordable on a monthly basis for buyers in eligible areas.
Income limits apply and are calculated at the household level, not just the borrower level. USDA moderate income limits for Texas vary by county and household size, and they are set at 115% of the area median income (AMI). Households with higher incomes may not qualify even if the property location is eligible. We run the income calculation early in the process to confirm eligibility before you get invested in a specific property.
What the USDA program includes
- No down payment (100% financing)
- Lower guarantee fees vs. FHA MIP
- Fixed 30-year term
- Purchase only (not for investment or vacation homes)
- Primary residence requirement
- Moderate income limits by county and household size
- Property must be in a USDA-eligible rural or suburban area
- No acreage cap, but land must be typical for the area
General parameters
These figures are illustrative starting points. Your actual loan terms depend on your credit profile, income, assets, property, and current market conditions.
- Down payment
- 0% (100% financing for eligible properties and borrowers)
- Upfront guarantee fee
- 1% of the loan amount (can be financed into the loan)
- Annual fee
- 0.35% of the outstanding balance, paid monthly
- Income limit
- 115% of area median income for your county and household size
- Terms available
- 30 years fixed
Apex Capital Mortgage, LLC (NMLS #2583932) supports Equal Housing Opportunity. This is not a commitment to lend. All loans are subject to credit approval, income and asset verification, and property appraisal. Rates, terms, and programs are subject to change without notice and may vary by borrower and property. Not all applicants will qualify. Information on this site is for general educational purposes and does not constitute financial or legal advice.
USDA loan questions
- How do I know if a Texas property is in a USDA-eligible area?
- USDA eligibility is determined at the property level using the USDA's online eligibility map, which is updated periodically. We check every property address directly rather than going by city or ZIP code, because eligibility can vary block by block in transitional areas. Share the address early and we verify it right away.
- Are there income limits for USDA loans in Texas?
- Yes. USDA loans are designed for moderate-income households, defined as up to 115% of the area median income for your county and household size. The limits vary considerably across Texas, and household income (not just borrower income) is counted. We run the income calculation in your first conversation so you are not surprised later.
- Does USDA work in the Hill Country or near Boerne and New Braunfels?
- Many Hill Country communities and areas near Boerne and New Braunfels have USDA-eligible zones. The key is the specific property address, not the general area. Some parts of New Braunfels proper have lost eligibility as the city has grown, while surrounding Comal County areas may still qualify. We check your specific address.
- Can I use a USDA loan to buy land or a fixer-upper?
- USDA loans are for the purchase of a primary residence in move-in condition. Raw land purchases are not eligible. Modestly impaired properties may be possible with a USDA repair escrow in some cases, but the property must meet USDA's habitability standards. We will review the property type with you upfront.
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