USDA loan programs are created by the United States Department of Agriculture Rural Development, also known as “USDA RD”. Alabama USDA loans provide low-cost, government insured mortgage options that suit a variety of home buying needs. The most common loans offered through USDA are known as “Guaranteed Loans”. USDA Guaranteed Loans feature 100% financing, which means you can use them to buy a home with no down payment.
There are several USDA loan programs available for Alabama mortgage applicants, so you may also be interested in Alabama USDA Guaranteed Loan Income Limits, Alabama USDA Direct Loan Limits, Alabama USDA Direct Loan Income Limits, all USDA Loan Limits, and USDA Loan Requirements.
Alabama USDA Loan Limits
USDA Guaranteed Loans don’t have set maximum loan limits, but instead carry maximum limitations on borrower income as well as debt-to-income ratio restrictions. Therefore, the USDA limits listed below are only estimates based upon those requirements.
USDA Guaranteed Loans
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.
