USDA Direct Loans (also known as USDA Section 502 Direct Loans) are a mortgage program that assists low- and very-low income individuals buy decent, safe, and clean housing in rural areas. This is done through payment assistance which increases a borrower’s ability to repay. That payment assistance can be best described a subsidy which lowers the mortgage payment for short periods. The amount of assistance largely depends on the adjusted family income. USDA Direct Home Loans in Iowa don’t work in the same manner as USDA Guaranteed Loans in Iowa. The USDA Guaranteed Loan Program is a more popular option and can be used for a wider range of applicant incomes.Iowa USDA Direct Loans are 100% financing mortgages. Unlike Guaranteed USDA Loans, applicants must have low or very low income to qualify for Direct Loans.

Iowa USDA Direct Loan Requirements

USDA Direct Loans are a mortgage program available for low-income individuals to buy homes in rural areas. USDA defines low- or very low income as anything between 50% and 80% of the Area Median (AMI). The statewide median income was recently reported as $60,523 in Iowa, but this number may differ from one county to the next. For home buyers that meet those requirements, USDA Loans are a zero-down mortgage, meaning there’s no down payment. To be eligible, applicants must also meet the following requirements:

  • You don’t presently have decent, clean, sanitary and safe housing.
  • You can’t get another mortgage from a different source with terms and conditions reasonably expected to be met.
  • The subject property must be your primary residence.
  • You must be legally eligible for a mortgage.
  • You must meet citizenship requirements or non-citizen requirements.
  • You must be eligible for participation in federal programs.

In addition, the subject property must meet the following requirements.

  • It must be moderately-sized for that area.
  • The home cause can’t exceed the area’s applicable loan limit.
  • The home can’t be designed for the production of income.

How much can I borrow with a USDA Direct Mortgage?

Up to the maximum loan limit, the amount of money that an applicant’s eligible for depends on their ability to pay it back. When evaluating home loan applicants for Direct home loans, Rural Development considers income, assets, debt, and payment assistance. And remember, you can’t borrow more than the local USDA loan limit for the county where the home is located, no matter what your repayment ability may be.

What areas in IA are eligible for USDA Direct Loans?

The subject property must be in an approved rural area. You can search specific addresses in Iowa for USDA eligibility here.

Are there other zero down mortgage options or low down payment mortgages in Iowa?

Yes, other low down payment mortgage options, and no down payment mortgage options are available in Iowa besides USDA Direct Loans. You can start by looking into USDA Guaranteed Loans in Iowa, FHA Loan in Iowa, or if you’re a veteran or qualified family member, VA Loans in Iowa. You may also want to research if any helpful Iowa down payment assistance programs may be available.

Search all USDA Guaranteed Loan Limits (Direct and Guaranteed Loans)
Learn about today’s USDA Loan Requirements

Direct Loans aren’t as popular as USDA Guaranteed Loans, which accommodate a wider range of borrower qualifications. The USDA sets specific maximum mortgage limits for Direct Loans in Iowa. Search home loan limits for your area below.

Iowa USDA Direct Loan Limits

Direct Loan Limit
Adair $251,862
Adams $251,862
Allamakee $251,862
Appanoose $251,862
Audubon $251,862
Benton $251,862
Black Hawk $251,862
Boone $251,862
Bremer $251,862
Buchanan $251,862
Buena Vista $251,862
Butler $251,862
Calhoun $251,862
Carroll $251,862
Cass $251,862
Cedar $251,862
Cerro Gordo $251,862
Cherokee $251,862
Chickasaw $251,862
Clarke $251,862
Clay $251,862
Clayton $251,862
Clinton $251,862
Crawford $251,862
Dallas $251,862
Davis $251,862
Decatur $251,862
Delaware $251,862
Des Moines $251,862
Dickinson $251,862
Dubuque $251,862
Emmet $251,862
Fayette $251,862
Floyd $251,862
Franklin $251,862
Fremont $251,862
Greene $251,862
Grundy $251,862
Guthrie $251,862
Hamilton $251,862
Hancock $251,862
Hardin $251,862
Harrison $251,862
Henry $251,862
Howard $251,862
Humboldt $251,862
Ida $251,862
Iowa $251,862
Jackson $251,862
Jasper $251,862
Jefferson $251,862
Johnson $251,862
Jones $251,862
Keokuk $251,862
Kossuth $251,862
Lee $251,862
Linn $251,862
Louisa $251,862
Lucas $251,862
Lyon $251,862
Madison $251,862
Mahaska $251,862
Marion $251,862
Marshall $251,862
Mills $251,862
Mitchell $251,862
Monona $251,862
Monroe $251,862
Montgomery $251,862
Muscatine $251,862
O'Brien $251,862
Osceola $251,862
Page $251,862
Palo Alto $251,862
Plymouth $251,862
Pocahontas $251,862
Polk $251,862
Pottawattamie $251,862
Poweshiek $251,862
Ringgold $251,862
Sac $251,862
Scott $251,862
Shelby $251,862
Sioux $251,862
Story $251,862
Tama $251,862
Taylor $251,862
Union $251,862
Van Buren $251,862
Wapello $251,862
Warren $251,862
Washington $251,862
Wayne $251,862
Webster $251,862
Winnebago $251,862
Winneshiek $251,862
Woodbury $251,862
Worth $251,862
Wright $251,862

More USDA Loan Resources

USDA Direct Loan Income Limits (Low Income)
USDA Direct Loan Limits (Low Income)

All USDA Loan Limits
All USDA Loan Income Limits
USDA Loan Requirements
USDA Loan Programs
USDA Loan Calculator

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