USDA Loans in Texas (2026): $0 Down, Income Limits & Map

Saving for a down payment while keeping up with Texas rent and everyday expenses can make buying a home feel out of reach, especially if you are shopping outside the major city centers.

This guide covers how USDA loans in Texas work in 2026, including Section 502 Guaranteed and Direct loan rules, the current county household income limits, property eligibility maps, and guarantee fees.

Check Your Texas USDA Loan Eligibility

You will walk away knowing whether your household income, credit profile, and target Texas town line up with USDA guidelines so you can shop for a zero-down home with confidence.

How USDA Loans Work in Texas (Section 502 Guaranteed Basics)

When most homebuyers talk about Texas USDA loans, they mean the USDA Rural Development Section 502 Single Family Housing Guaranteed Loan Program. Through this program, the USDA provides a 90% loan note guarantee to approved private mortgage lenders, allowing those lenders to offer 100% financing (no down payment) to eligible low- and moderate-income buyers purchasing a primary residence in a USDA-designated rural area.

Key features of a Section 502 Guaranteed loan include:

• 100% financing: Qualified buyers can finance the full appraised value of the home with no down payment required.
• No fixed dollar loan limit: According to USDA Handbook HB-1-3555, there is no fixed dollar maximum loan amount on a Guaranteed loan; instead, your maximum loan is capped by your repayment ability and the property's appraised value.
• Loan-to-value (LTV) flexibility: Your loan can reach 100% of the appraised value, and may exceed 100% LTV only by the amount of the upfront guarantee fee if you roll that fee into the mortgage. (One exception: new construction lacking required certifications or warranties is limited to 90% LTV.)
• Seller concessions up to 6%: Interested parties—such as the seller, builder, or real estate agent—may contribute up to 6% of the sales price toward your closing costs. Lender premium pricing, seller-paid repairs, and the buyer's agent commission do not count toward that 6% cap.

Interest rates on USDA Guaranteed loans are set daily by participating lenders based on market conditions. To see how a zero-down USDA mortgage stacks up against other low-down-payment loans, you can explore all Texas Home Loan Options.

USDA Guarantee Fee and Annual Fee (Current Schedule)

Instead of traditional private mortgage insurance (PMI), USDA Section 502 Guaranteed loans charge an upfront guarantee fee and an ongoing annual fee. According to USDA Rural Development's Fiscal Year 2027 Conditional Commitment Notice (covering October 1, 2026 through September 30, 2027), the current fees for both purchase and refinance transactions are:

By comparison, FHA Loans in Texas require a 3.5% minimum down payment (for borrowers with a 580+ credit score), a 1.75% upfront mortgage insurance premium, and a 0.55% annual mortgage insurance premium on a typical 30-year purchase loan of $726,200 or less with 3.5% down.

Note on early fiscal year closings: USDA noted a brief funding lapse of about one week at the start of FY 2027, during which Rural Housing Service issues Conditional Commitments "subject to the availability of commitment authority" before the final Loan Note Guarantee issues.

Check Your Texas USDA Loan Eligibility

USDA Income Limits in Texas for 2026

To qualify for a Section 502 Guaranteed loan, your household's adjusted annual income cannot exceed the USDA "moderate income" limit for the county where you are buying. Under USDA rules, moderate income is defined as the greater of 115% of the U.S. median family income, 115% of the average of the statewide and state non-metro median family incomes, or 115/80ths of the area low-income limit.

According to USDA Procedure Notice 657 and HB-1-3555 Appendix 5, the current published USDA income limits in Texas took effect on July 13, 2026. Because income limits can change, buyers should always confirm current figures with a participating lender.

Whole-Household Adjusted Income Rule

USDA tests the adjusted annual income of the entire household. That includes all adult household members, not just the borrowers on the loan.

For families larger than eight people, USDA adds 8% of the 4-person limit for each additional person beyond eight.

2026 Texas USDA Guaranteed Loan Income Limits by County

Below are the current published FY 2026 USDA Guaranteed moderate-income limits for Texas counties (effective July 13, 2026), based on USDA Appendix 5 and the USDA Income Eligibility lookup tool:

If you are also comparing state bond and down payment assistance programs, see our breakdown of Texas Homebuyer Income & Purchase Price Limits and 58 Texas First-Time Home Buyer Grants & Programs (2026).

Check Your Texas USDA Loan Eligibility

Borrower, Credit, and Property Rules for Section 502 Guaranteed Loans

Beyond household income, both the borrower and the home must satisfy USDA guidelines in Handbook HB-1-3555.

Credit Expectations (No Fixed Minimum Score in the USDA Handbook)

You may see websites claim that USDA requires a 640 credit score, but Handbook HB-1-3555 sets no single minimum credit score. Instead, USDA's automated system—the Guaranteed Underwriting System (GUS)—determines the score used to issue an Accept, Refer, or Refer with Caution recommendation. If a loan is manually underwritten, the file requires a validated credit score (the middle of three scores, or the lower of two). Ask a participating lender early how your credit profile will be reviewed.

Certain credit events do trigger specific rules under HB-1-3555:

• Automatic ineligibility: Applicants with delinquent federal non-tax debt, certain delinquent child support obligations, or a CAIVRS (Credit Alert Verification Reporting System) result other than "A" are ineligible.
• Chapter 7 bankruptcy: A Chapter 7 bankruptcy discharged more than 36 months before loan submission is not treated as adverse credit. A discharge within 36 months requires a formal credit exception unless GUS returns an "Accept" recommendation.

Debt-to-Income (DTI) Ratios

USDA's standard debt-to-income guidelines are 29% for your housing payment (PITI: principal, interest, taxes, and insurance) and 41% for total monthly debt.

• GUS "Accept" files: Loans that receive an Automated GUS Accept recommendation do not require a ratio waiver.
• Manual or "Refer" files: To qualify for a ratio waiver up to 32% / 44% on a manual or Refer file, all applicants must have a validated credit score of 680 or higher plus at least one acceptable compensating factor.

Occupancy, Citizenship, and Owning Another Home

• Residency status: Applicants must be a U.S. citizen, a U.S. non-citizen national, or a Qualified Alien.
• Primary residence: You must personally occupy the home as your primary residence.
• Predominantly residential use: The property must be predominantly residential. Income-producing land or buildings, agricultural operations, and commercial properties are ineligible.
• Owning another home: Under HB-1-3555 Section 8.2.A, an applicant may own at most one other single-family home, and only if all four of these conditions are met: you will have no other active USDA loan by closing, you are financially qualified to carry both homes, the new USDA property will be your primary residence, and your current home no longer meets your household's needs.

For a broader overview of how credit, debt ratios, and down payments work across loan types, read our guide on the Requirements to Buy a House in Texas.

USDA Eligible Areas in Texas & How to Check a Property Map

A published county income limit is not the same thing as property eligibility. For example, Harris, Dallas, and Travis counties all have published USDA income limits, yet large parts of those counties, especially central areas, can be ineligible on the property map. Every single property address must be checked against the USDA rural map.

How USDA Defines "Rural"

Under HB-1-3555 Section 12.3.A, USDA generally designates an area as eligible if it falls into one of four categories:

1. Open country that is not part of, or associated with, an urban area.
2. Places that are rural in character with a population under 10,000.
3. Places outside a Metropolitan Statistical Area (MSA) with a population between 10,000 and 20,000 that have a serious lack of mortgage credit.
4. Grandfathered areas with populations of 10,000 to 35,000 that are rural in character, which keep their eligibility until the 2030 census data review.

Texas Map Changes (2020-Census Review)

USDA reviews eligible area maps at least every five years, and every three years for fast-growing areas and eligible communities inside MSAs. In USDA Rural Development's Texas map review (effective October 1, 2023, the most recent statewide notice on file), census growth shifted boundaries across the state:

• Examples of Texas areas that became eligible (about 32 areas): Aransas Pass, Port Aransas, Bridge City, Robstown, the outskirts of Kingsville, areas outside Abilene and San Angelo, areas east of Midland, Mountain City in Hays County, Oyster Creek, Richwood, Surfside Beach, and Quintana in Brazoria County, plus several communities in Cameron and Hidalgo counties.
• Examples of Texas areas that became ineligible (about 97 areas): Annexed zones and expanding city limits around Austin (Travis/Hays), Buda, Cedar Park, Conroe, Denton, Burleson, Waxahachie, Weatherford, Wylie, Tyler, Waco, Victoria, Edinburg, and Brownsville, along with entire municipalities removed such as Cibolo, Converse, The Hills, and Buffalo Gap (listed under Williamson County).

If a Texas property's area is later found to be non-rural, the property remains eligible for a USDA refinance.

How to Check Any Texas Address

Lenders verify addresses using the official USDA Eligibility site or directly inside GUS, which returns one of three results: Eligible, Ineligible, or Unable to Determine. Because eligibility is decided address by address, let our team check the exact street address before you spend money on an option fee or inspection.

Check Your Texas USDA Loan Eligibility

USDA Section 502 Direct Home Loans in Texas

In addition to the Guaranteed program offered through private lenders, USDA Rural Development operates the Section 502 Direct Home Loan Program directly through local USDA Rural Development offices.

Who Section 502 Direct Serves

The Direct program is built for low- and very-low-income Texas applicants whose adjusted household income is at or below the area low-income limit (found in HB-1-3550 Appendix 9, revised effective July 13, 2026). To qualify, applicants must:

• Currently lack decent, safe, and sanitary housing
• Be unable to obtain credit elsewhere
• Agree to occupy the property as a primary residence
• Have legal capacity to incur the loan obligation, meet citizenship or eligible non-citizen rules, and not be suspended or debarred from federal programs

Key Terms and July 2026 Updates (PN 657)

• Payment assistance subsidy: Direct loans include payment assistance (a subsidy) that can lower the borrower's effective interest rate. The note rate is fixed and set at loan approval or loan closing, whichever is lower; your local Rural Development office can tell you the current rate. The subsidy is subject to recapture when title transfers or the borrower stops living in the home.
• Loan term: Up to 33 years, or up to 38 years for very-low-income applicants who cannot afford payments on a 33-year schedule.
• Down payment and property limits: Typically no down payment is required (though applicants with assets above program asset limits may be required to put some toward the purchase). The home's market value cannot exceed the area loan limit, and it cannot be designed for income-producing activities.
• Recent Procedure Notice 657 rules (effective July 2026): Under PN 657, Direct applicants who already own a home are generally ineligible unless they have a true housing hardship. In addition, student loan payments must always be counted (using 0.5% of the loan balance if no monthly payment is reported), collection accounts without a repayment plan are counted at 5% of the balance, and a repossession within 36 months is treated as an indicator of unacceptable credit. When calculating adjusted household income on Direct files, PN 657 specifies a $500 dependent deduction and a $550 elderly-household deduction.

Applications for Section 502 Direct loans are accepted year-round directly through local USDA Rural Development offices in Texas; contact the office that serves your county for current application steps.

Comparing USDA Guaranteed, USDA Direct, and Texas FHA Loans

If you are weighing zero-down and low-down-payment mortgages in Texas, here is how the three programs compare side by side:

If your target neighborhood falls inside ineligible city limits—or your household income is above the county cap—check out Texas FHA Loan Requirements (2026) and Texas FHA Loan Limits by County (2026), or see if you qualify for zero-down VA Loans in Texas.

Next Steps: Check Your Texas USDA Eligibility

Buying a home in a small Texas town or outer suburb with $0 down can help you keep more of your cash for moving expenses and future home maintenance. Because USDA eligibility hinges on both your whole-household adjusted income and the exact street address of the property, running both checks upfront saves you time and protects your earnest money.

Our team can help you verify whether an address is inside a USDA-eligible zone, calculate your household income under the July 2026 Texas limits, and compare a Section 502 Guaranteed loan against FHA and state assistance options with a participating lender.

Check Your Texas USDA Loan Eligibility