# USDA loans in Virginia: who qualifies and what it costs

Source: https://nobullshitloans.com/loans/usda/
By Tyler Rood, Loan Officer, NMLS ID # 2064776, Edge Home Finance, LLC (NMLS ID # 891464). Updated 2026-11-09.

## The short answer

A USDA guaranteed loan lets you buy a home in Virginia with no down payment if you qualify and pass two more tests: the address is USDA-eligible, and household income is at or under the 2026 limit ($130,550 for 1 to 4 people in the Richmond HUD metro area, $172,350 for 5 to 8). For fiscal 2027 loans, USDA charges a 1% upfront guarantee fee and 0.35% a year. Richmond city isn't eligible, so check the address first.

If you're not a veteran and you want to buy with no down payment, USDA is the next place I look. It works when two things line up, the address and your household income, and either one can rule it out. Here's how to check both for a USDA loan in Virginia, with the Richmond-area numbers, what it costs for fiscal 2027, and one timing caveat to know before you count on it.

## How a USDA loan works in Virginia

USDA's Single Family Housing Guaranteed Loan Program is a mortgage made by a private lender and guaranteed by USDA Rural Development, built for moderate incomes in eligible areas. The parts that matter:

- No down payment is required.
- The home has to be your primary residence.
- Instead of PMI, you pay an upfront guarantee fee and an annual fee.
- You have to pass two eligibility tests, one for the address and one for household income, on top of normal loan qualifying.

When a buyer asks me about no-money-down options, my order is simple. If you're eligible for a VA loan, that's the first check, and it's on my [VA loan page](https://nobullshitloans.com/veterans/va-loan/). If not, USDA, which depends on where the house is. Then Virginia Housing's programs.


**USDA loans around Richmond, the key numbers**

- Down payment: None (closing costs and prepaids are separate)
- Income limit, 1 to 4 people: $130,550 (household income, Richmond HUD metro area; $122,800 standard limit)
- Income limit, 5 to 8 people: $172,350 (household income, Richmond HUD metro area; $162,100 standard limit)
- Upfront guarantee fee: 1% (of the loan, usually added to the loan amount)
- Annual fee: 0.35% (of the loan balance a year, paid monthly)
- Seller credits: Up to 6% (of the sales price, toward closing costs, prepaids and escrow)
- Location: Eligible areas (checked address by address; Richmond city is not eligible)
- Occupancy: Primary home (it has to be your primary residence)

_2026 income limits, for files submitted on or after July 13, 2026. Fees for fiscal 2027, which runs October 1, 2026 to September 30, 2027._


## Does the address qualify? Using the USDA eligibility map

Start with the address, not the county. USDA decides eligibility by location, and you can search the exact address on [USDA's property eligibility map](https://eligibility.sc.egov.usda.gov/). Richmond city is not eligible. Farther out, parts of the surrounding counties can be, and eligibility is set address by address, so a street-level check is the only one that counts.

Check before you fall in love with a house. A USDA buyer who finds the perfect place just over the line has a 3% to 3.5% down payment problem the day they find out.

## USDA income limits for the Richmond area in 2026

The income test looks at your whole household, not just the people on the loan. USDA starts with the income of every adult who will live in the home, subtracts certain allowed deductions, and compares the result to the limit for your area and household size.

| Household size | Richmond HUD metro area | USDA standard limit |
|---|---|---|
| 1 to 4 people | $130,550 | $122,800 |
| 5 to 8 people | $172,350 | $162,100 |

These are the 2026 limits, in effect for files submitted on or after July 13, 2026. King and Queen County uses the standard limit. The table doesn't spell out which localities sit in the Richmond metro group, so confirm the limit for your county with USDA's income eligibility tool on the same site as the map.

**Worked example: Household income test, Richmond HUD metro area, household of three**
- Buyer's income: $65,000
- plus Co-buyer's income: $40,000
- plus Adult son who lives there, not on the loan: $30,000
- equals: Household income USDA starts from: $135,000
- minus 2026 limit for 1 to 4 people: $130,550
- equals: Over the limit by: $4,450
Note: Allowed deductions can lower the household figure, so this family should still ask. The loan itself qualifies on the buyers' income; the eligibility test counts the household.
_Hypothetical household, rounded._


That's the surprise I'd want you to have now, not after you're under contract. Every adult in the house with an income is part of the test unless a deduction or exclusion applies.

## USDA guarantee fee and annual fee for fiscal 2027

USDA doesn't charge PMI. It charges two fees that do the same job:

- **Upfront guarantee fee:** 1% of the loan, usually added to the loan amount.
- **Annual fee:** 0.35% of the loan balance a year, paid monthly.

Both are unchanged for fiscal 2027, which runs October 1, 2026 to September 30, 2027, and they're the same for a purchase or a refinance.

**Worked example: USDA on a $300,000 home with no down payment**
- Price: $300,000
- minus Down payment: $0
- equals: Base loan: $300,000
- plus Upfront guarantee fee (1%), added to the loan: $3,000
- equals: Loan amount: $303,000
- Principal and interest: $1,915
- plus Annual fee (0.35% a year): $88
- equals: Monthly, before taxes and homeowners insurance: $2,003
Note: The loan ends up bigger than the price because the fee is financed.
_Hypothetical, rounded. Example rate of 6.5%, 30-year fixed. Not a quote._


For comparison, [FHA](https://nobullshitloans.com/loans/fha/) on the same $300,000 home needs $10,500 down, charges 1.75% upfront and runs 0.55% a year. Your cash to close is still more than zero on USDA, because closing costs and prepaids are separate from the down payment, and seller credits and lender credits can cover much of that. What goes into that number is on my [cash to close page](https://nobullshitloans.com/buy/cash-to-close/).

## USDA vs FHA and conventional: who it fits

USDA fits a buyer with steady income under the limit, a house in an eligible area and not much saved. It doesn't fit a house in Richmond city, a household over the limit, or a second home or rental.


**USDA vs FHA vs conventional** USDA is the only one of the three with no down payment, and the only one limited by where the house is.

| | USDA | FHA | Conventional |
|---|---|---|---|
| Minimum down payment | None | 3.5% | As little as 3%, with conditions |
| Upfront fee | 1% | 1.75% | None |
| Ongoing cost | 0.35% a year | 0.50% to 0.55% a year | PMI priced to your score, under 20% down |
| Income limit | Yes, the whole household | No | Only on HomeReady and Home Possible |
| Location | Eligible areas only | Anywhere | Anywhere |
| Seller credits | Up to 6% of the price | Up to 6% of the price | 3% to 9% depending on down payment |


If USDA is out, the next comparison is usually FHA against conventional, and that math is on my [FHA vs conventional page](https://nobullshitloans.com/loans/fha-vs-conventional/). Virginia Housing's own programs are on my [Virginia first-time buyer programs page](https://nobullshitloans.com/virginia/first-time-buyer-programs/).

## The funding gap at the start of each fiscal year

USDA's fiscal 2027 notice explained that the program goes without funds for a short time at the start of each fiscal year, about a week after October 1, and that during that gap it issues conditional commitments "subject to the availability of commitment authority." In plain English, USDA's sign-off on your loan can depend on the program having money available at that moment. For fiscal 2027 that gap is over: USDA announced on October 6, 2026 that the year's funds were available. If your closing lands near the start of a fiscal year, or while federal funding is in question, check the program's current status before you set the date, and leave some room in the contract timeline.

If the address passes and the household income fits, the rest is a normal mortgage file. Run the address first.

## Frequently asked questions

### I'm not a veteran. What are my no-down-payment options?

USDA is the main one, if the address and your household income fit. Virginia Housing's programs are the next place I look, with their own income and price limits. If none of those fit, FHA and conventional are the low-down-payment fallbacks.

### How much can the seller pay toward closing costs on a USDA loan?

Up to 6% of the sales price, toward your closing costs, prepaids and escrow. A 3% credit fits every major loan program, which is why I call it a safe number to ask for, and USDA leaves room above that. Program limits change, so check with me before writing a credit into an offer; how to ask for one is on my [making an offer page](/buy/making-an-offer/).

### Can I use a USDA loan if I already own a home?

Only in narrow cases. Your current home has to no longer meet your household's needs, you have to move into the new one as your primary residence, you can keep no more than one other house, and you have to qualify to own both. Rent from the house you keep counts only with 24 months of consistent rental history, so for most people that means qualifying with both payments.

### Is USDA only for farms and tiny towns?

No. USDA draws eligible areas on a map, address by address, and outer parts of the counties around Richmond can qualify. The home has to be your primary residence, not a farm business or a rental.

## Sources

- [USDA Rural Development, Fiscal Year 2027 Conditional Commitment Notice (September 16, 2026)](https://content.govdelivery.com/accounts/USDARD/bulletins/42b1054)
- [USDA Rural Development, Fiscal Year 2027 SFH Guaranteed funds now available (October 6, 2026)](https://content.govdelivery.com/accounts/USDARD/bulletins/42d03db)
- [USDA Handbook HB-1-3555, Appendix 5, guaranteed loan income limits (July 13, 2026)](https://www.rd.usda.gov/media/file/download/rd-grhlimitmap.pdf)
- [USDA Handbook HB-1-3555, Chapter 9, annual and adjusted household income](https://www.rd.usda.gov/files/3555-1chapter09.pdf)
- [7 CFR 3555.102, USDA seller contribution limit](https://www.law.cornell.edu/cfr/text/7/3555.102)
- [7 CFR 3555.151(e), USDA eligibility of current homeowners](https://www.law.cornell.edu/cfr/text/7/3555.151)

## Disclosures

Individual Originator: Tyler Rood, Loan Officer, NMLS ID # 2064776 (www.nmlsconsumeraccess.org). Licensed in NC, PA, TX and VA.
Edge Home Finance, LLC | NMLS ID # 891464 | www.nmlsconsumeraccess.org. Licensed in all U.S. states & D.C., EXCEPT New York. Edge Home Finance, LLC is a mortgage broker, not a direct lender or creditor. Virginia Broker License MC-7006. North Carolina Mortgage Broker License B-201539. Pennsylvania Mortgage Broker License 81041. Texas: Mortgage Company License, Department of Savings and Mortgage Lending.
Numbers on this page are illustrations, not offers. Any rate shown on this site is an example. Rates may change or may not be available at the time of loan commitment or lock-in.
Edge Home Finance, LLC is a private mortgage broker and is not affiliated with, endorsed by, or acting on behalf of or at the direction of the U.S. Department of Veterans Affairs (VA), the Federal Housing Administration (FHA), the Department of Housing and Urban Development (HUD), or any other government agency.
We do business in accordance with the Fair Housing Act and the Equal Credit Opportunity Act.