USDA LOAN INCOME LIMITS IN TEXAS: DO YOU QUALIFY FOR A ZERO-DOWN MORTGAGE?

USDA Loan Income Limits in Texas: Do You Qualify for a Zero-Down Mortgage?

USDA Loan Income Limits in Texas: Do You Qualify for a Zero-Down Mortgage?

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If you're looking to buy a home in Texas but don’t have a large down payment saved up, a USDA home loan could be your perfect solution. With zero down payment, low interest rates, and flexible credit requirements, these loans make homeownership more affordable for eligible buyers in rural and suburban areas.

However, USDA loans have income limits, meaning your household income must be below a certain threshold to qualify. In this guide, we’ll explain USDA loan income limits in Texas, how they vary by location and household size, and how to determine if you qualify.

What Is a USDA Home Loan?

A USDA home loan, backed by the U.S. Department of Agriculture (USDA), is designed to help low-to-moderate-income buyers purchase homes in eligible rural and suburban areas. It offers:

✔ 0% down payment – No upfront cash required
✔ Lower interest rates – More affordable than conventional loans
✔ Reduced mortgage insurance – Lower monthly costs
✔ Flexible credit requirements – Easier approval for buyers with fair credit

To qualify, you must meet income limits, which are based on your location and household size.

USDA Loan Income Limits in Texas for 2024

USDA income limits are set based on county and the number of people in your household. They are designed to ensure that low-to-moderate-income families receive assistance.

For most counties in Texas (2024):

  • 1–4 person households: $110,650
  • 5–8 person households: $146,050

However, some high-cost areas have higher limits.

???? Example of Higher USDA Income Limits (2024):

  • Austin (Travis County): $136,600 (1-4 people) / $180,400 (5-8 people)
  • Dallas-Fort Worth (Collin, Denton, Tarrant Counties): $131,100 (1-4 people) / $173,050 (5-8 people)
  • Houston (Harris County): $122,600 (1-4 people) / $161,900 (5-8 people)

???? Check USDA income limits for your specific county here.

How USDA Income Limits Are Calculated

The USDA considers the total gross income of all household members (not just those on the loan). However, they also allow certain deductions, which can help you qualify.

✅ Allowable Deductions

You can subtract the following from your total household income:

  • $480 per child under 18
  • $480 per full-time student (18+)
  • $400 per elderly (62+) or disabled household member
  • Certain medical and childcare expenses

???? Example Calculation:

  • Family of 4 in Dallas with a total household income of $132,000
  • Two children under 18 = $960 deduction
  • One elderly parent = $400 deduction
  • Adjusted income = $130,640 → ✅ Qualifies for USDA loan (Dallas limit = $131,100)

Who Qualifies for a USDA Loan in Texas?

To be eligible for a USDA home loan, you must meet these three main requirements:

1. Income Eligibility

  • Must be below the county’s income limit
  • Income is based on household size and gross earnings
  • Some deductions can lower your income calculation

2. Location Requirements

  • The home must be in a USDA-eligible rural or suburban area
  • Major cities like Houston, Dallas, Austin, and San Antonio DO NOT qualify, but surrounding areas do
  • Check the USDA Property Eligibility Map here

3. Credit & Debt-to-Income (DTI) Requirements

  • Credit score of 640+ (lower scores may still qualify with manual underwriting)
  • DTI of 41% or lower preferred, but exceptions are possible

Benefits of a USDA Loan in Texas

✅ Why Choose a USDA Loan?

✔ No Down Payment Required – Save thousands upfront
✔ Lower Interest Rates – More affordable than FHA/conventional loans
✔ Lenient Credit Requirements – Easier approval for moderate-credit buyers
✔ Low Monthly Mortgage Insurance (PMI) – Costs less than FHA loans

❌ Potential Downsides

❌ Location Restrictions – Only available in USDA-eligible areas
❌ Income Limits Apply – High earners may not qualify
❌ Property Restrictions – Homes must meet USDA safety and livability standards

How to Apply for a USDA Loan in Texas

Step 1: Check Income Eligibility

  • Use the USDA income limits tool to see if you qualify.

Step 2: Find a USDA-Approved Lender

  • Work with a lender that offers USDA loans (not all lenders do).

Step 3: Get Pre-Approved

  • Provide income, employment, and credit details.

Step 4: Find a USDA-Eligible Home

  • Use the USDA Property Eligibility Map to check locations.

Step 5: Submit a Loan Application

  • Your lender will verify all information and process your loan.

Step 6: Close on Your Home

  • Pay any closing costs and move in! ????

Final Thoughts: Do You Qualify for a USDA Loan in Texas?

If you’re a low-to-moderate-income homebuyer looking for a zero-down mortgage, a USDA home loan could be your best option. Just make sure you:

✔ Meet income limits for your county
✔ Buy a home in a USDA-eligible area
✔ Have a credit score of 640+ (or meet alternative criteria)

By using USDA’s zero-down financing, you can make homeownership in Texas more affordable than ever!

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