What are Alabama USDA Loans?

USDA RD stands for United States Department of Agriculture Rural Development. Alabama USDA loan programs offer a low-cost, insured mortgage option suiting a variety of needs.

Alabama USDA Loan Limits

Map

Area
1-4 Person Households
5-8 Person Households
Anniston-Oxford-Jacksonville, AL MSA$272,000$340,000
Auburn-Opelika, AL MSA$272,000$340,000
Barbour County, AL$272,000$340,000
Birmingham-Hoover, AL HUD Metro FMR Area$272,000$340,000
Bullock County, AL$272,000$340,000
Butler County, AL$272,000$340,000
Chambers County, AL$272,000$340,000
Cherokee County, AL$272,000$340,000
Chilton County, AL HUD Metro FMR Area$272,000$340,000
Choctaw County, AL$272,000$340,000
Clarke County, AL$272,000$340,000
Clay County, AL$272,000$340,000
Cleburne County, AL$272,000$340,000
Coffee County, AL$272,000$340,000
Columbus, GA-AL MSA$272,000$340,000
Conecuh County, AL$272,000$340,000
Coosa County, AL$272,000$340,000
Covington County, AL$272,000$340,000
Crenshaw County, AL$272,000$340,000
Cullman County, AL$272,000$340,000
Dale County, AL$272,000$340,000
Dallas County, AL$272,000$340,000
Daphne-Fairhope-Foley, AL MSA$272,000$340,000
Decatur, AL MSA$272,000$340,000
DeKalb County, AL$272,000$340,000
Dothan, AL HUD Metro FMR Area$272,000$340,000
Escambia County, AL$272,000$340,000
Fayette County, AL$272,000$340,000
Florence-Muscle Shoals, AL MSA$272,000$340,000
Franklin County, AL$272,000$340,000
Gadsden, AL MSA$272,000$340,000
Greene County, AL$272,000$340,000
Henry County, AL HUD Metro FMR Area$272,000$340,000
Huntsville, AL MSA$289,000$391,000
Jackson County, AL$272,000$340,000
Lamar County, AL$272,000$340,000
Macon County, AL$272,000$340,000
Marengo County, AL$272,000$340,000
Marion County, AL$272,000$340,000
Marshall County, AL$272,000$340,000
Mobile, AL MSA$272,000$340,000
Monroe County, AL$272,000$340,000
Montgomery, AL MSA$272,000$340,000
Perry County, AL$272,000$340,000
Pickens County, AL HUD Metro FMR Area$272,000$340,000
Pike County, AL$272,000$340,000
Randolph County, AL$272,000$340,000
Sumter County, AL$272,000$340,000
Talladega County, AL$272,000$340,000
Tallapoosa County, AL$272,000$340,000
Tuscaloosa, AL HUD Metro FMR Area$272,000$340,000
Walker County, AL HUD Metro FMR Area$272,000$340,000
Washington County, AL$272,000$340,000
Wilcox County, AL$272,000$340,000
Winston County, AL$272,000$340,000

What is the maximum amount that I can borrow?

The maximum amount for an USDA home loan is determined by:

  • Maximum Loan Amount: The is no set maximum loan amount allowed for USDA Rural Home Loans. Instead, your debt-to-income ratios will dictate how much home your can afford (29/41 ratios). Additionally, your total household monthly income must be within USDA allowed maximum income limits for your area. Maximum USDA Guaranteed Loan income limits for your area can be found at here.
  • Maximum financing: The maximum USDA Rural Development Loan amount is 102% of the appraised value of the home (100% plus the 2% USDA RD Loan guarantee fee).

 

What types of loans does USDA offer in Alabama?

Currently, there are two kinds of USDA Home Loans available in Alabama for single family households:

  • USDA Guaranteed Rural Housing Loans – USDA Guaranteed Home Mortgage Loans are the most common type of USDA Loan in Alabama and allow for higher income limits and 100% financing for home purchases. USDA Guaranteed Loan applicants may have an income of up to 115% of the median household income for the area. Area income limits for this program can be viewed here. All USDA Guaranteed Loans carry 30 year terms and are set at a fixed rate.
  • USDA Direct Rural Housing Loans – USDA Direct Housing Loans are less common than USDA Guaranteed Loans and are only available for low and very low income households to obtain homeownership, as defined by the USDA. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Click here to see area income limits for this program.

What factors determine if I am eligible for a USDA Loan in Alabama?

To be eligible for A USDA Rural Loan in Alabama, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income (29% ratio). Your credit background will be fairly considered. A 620 FICO credit score is required to obtain a USDA Rural Housing Loan approval through most lenders. You must also have enough income to pay your housing costs plus all additional monthly debt (41% ratio). These ratios can be exceeded somewhat with compensating factors. Applicants for loans may have an income of up to 115% of the median income for the area. Maximum USDA Guaranteed Loan income limits for your area can be found at here. Maximum USDA Direct Loan income limits for your area can be found at here. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance.

 

How much money will I need for the down payment and closing costs?

USDA Rural Development Mortgage Loans require no down payment and they allow for the closing costs to be included in the loan amount (appraisal permitting).

What property types are allowed for USDA Rural Loan Mortgages?

While USDA Mortgage Guidelines do require that the property be Owner Occupied (OO), they do allow you to purchase condos, planned unit developments, manufactured homes, and single family residences.

 

Zero-down USDA Guaranteed Loans are the most popular rural development mortgage program in Alabama. USDA doesn’t set specific maximum loan limits for guaranteed mortgages. Instead, local limits are determined by a combination of the area USDA maximum income limit and the borrowers debt-to-income ratio.

This approach means that guaranteed USDA loan limits are fluid and based upon numerous factors. The limits listed below are based on approximate calculations. Actual guaranteed loan limits may vary.

Alabama USDA Guaranteed Loan Limits

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