Best USDA Mortgage Lenders Of 2025

Best National Bank USDA Lender: Flagstar Bank

Flagstar Bank is one of the nation’s largest mortgage loan originators and mortgage servicers. While branch locations can only be found in 29 states, USDA loans are available to borrowers online nationwide.

Available in All 50 States

Online application process available; in-person branches also are available at 87 retail locations in 29 states.

How To Apply

Flagstar Bank offers several ways for customers to get a mortgage. They can apply online or visit a lender in person.

Customer support hours, including for email, phone and online chat, are Monday–Friday, 7:30 a.m. to 8 p.m. ET and Saturday 7:30 a.m. to 4 p.m ET.

Speed

Preapproval time is less than three days, while its average closing time is 35 days, which is shorter than the industry average. In some cases, closing can occur in as few as 11 days.

Credit Requirements

Flagstar Bank has mortgage products with minimum credit score requirements of 680, however it doesn’t specify a minimum credit score for its USDA loans.

The lender considers alternative credit data, such as rent and utility payments, when reviewing mortgage applications.

Best for Fast Online Loan Preapproval: PNC

PNC Bank is one of the largest financial services institutions in the U.S. with approximately 2,300 branches across the country.

Available in All 50 States

PNC is available online in all 50 states, but it also has branches for borrowers more comfortable with a brick-and-mortar experience in the following states: Alabama, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin.

How To Apply

Borrowers can apply online or in person at a bank location. Customer support by phone is available Monday through Thursday from 8 a.m. to 9 p.m. ET, Friday from 8 a.m. to 5 p.m. ET and Saturday from 9 a.m. to 2 p.m. ET.

Speed

Preapproval takes between 20 to 30 minutes. The average closing time is 45 days, which is about the industry average. In some cases, closing can be as short as 30 days.

Credit Requirements

Borrowers must have a minimum credit score of 620, but aim for a score of at least 640 if you’re seeking a USDA loan.

Best for Borrowers with Low Credit Scores: Guild Mortgage

Guild Mortgage is a nationally recognized independent mortgage lender that offers USDA loans with “better-than-average” interest rates and a low credit score requirement.

Available in Most States

Guild Mortgage has over 200 branch locations in 43 states.

How To Apply

Guild Mortgage offers both branch locations and online access to borrowers who want to apply for a mortgage. Their paperless application process allows borrowers to send paperwork electronically as well as apply and keep track of the application process online.

Phone support is very limited, operating only Monday–Friday from 6:00 a.m. to 5:00 p.m. PT; the lender is closed on weekends.

Speed

Preapproval times are not as fast as other lenders, with a one- to three-day turnaround on preapproval letters. However, Guild Mortgage offers a 17-day closing guarantee, which can be attractive for borrowers who need to close quickly.

Credit Requirements

Guild Mortgage requires a minimum credit score of 540 for USDA loans—one of the lowest requirements we found among lenders researched.

Best for Borrowers in East Coast and Southern States: Truist

Truist offers in-person and online mortgage services, including USDA loans, to some of the fastest-growing markets in the U.S.

Available in 47 States

Truist is available in 47 states plus Washington, D.C.; the exceptions being Alaska, Arizona and Hawaii. In addition, the bank has more than 2,000 branch locations, however most of them are located in the eastern and southern portions of the U.S.

You can find Truist branches in Washington, D.C. and the following 17 states: Alabama, Arkansas, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, North Carolina, New Jersey, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia.

How To Apply

Borrowers can apply online or in person if branch locations are available. Customer support is available by phone Monday–Friday, 8 a.m. to 8 p.m. ET and Saturday from 8 a.m. to 5 p.m. ET. The bank is closed on Sundays.

Speed

Borrowers can count on getting preapproved within 24 hours.

Credit Requirements

Truist’s minimum credit score requirement for USDA loans is 620.

USDA loans are designed for borrowers who might not qualify for a conventional mortgage but still meet USDA eligibility requirements. These requirements include buying a home in a designated area, meeting income limits and certifying that the home you’re buying will be your primary residence.

Before you begin comparing lenders, make sure you meet the requirements.

• To find out if the neighborhood or home you’re interested in is located in a qualifying area for a USDA mortgage, search the USDA eligibility map.
• You’ll also want to make sure your income does not exceed USDA thresholds, which is 115% of the median income in your area. Keep in mind that limits can vary depending on location and cost of living. The full list of income limits by area and family size can be found at the USDA.gov website.

Here are some tips to consider once you’re ready to compare USDA lenders:

• Identify which lenders offer USDA loans. Compile a shortlist of mortgage lenders that you’d like to work with and find out which ones offer USDA loans.
• Find out what rates each lender offers. Next, find out what interest rates they offer for USDA loans. You may be tempted to go with the one with the lowest rate, but consider the next tip before you do.
• Ask about the lender fees. Some lenders are less expensive than others. You might have to apply for a loan to get a more accurate picture of what interest rate you qualify for and how much the loan will end up costing.

After you apply for a USDA loan, you’ll receive a loan estimate. By applying with several lenders you can compare these estimates and even use them to negotiate lower interest rates or certain fees, such as application or underwriting fees.

Comparison shopping often leads to lower interest rates, so be sure to collect as much information as you can. You can use a loan estimate from one lender to potentially negotiate a lower rate with another lender.

Forbes Advisor reviewed 12 mortgage lenders that do business both online and in person throughout the United States. The lenders we reviewed represent some of the largest mortgage lenders by volume, which include banks, credit unions and online lenders.

Our scoring methodology included capturing more than 10 data points, which covered interest rates, lender fees, discounts, accessibility and borrower requirements.

The best lenders for USDA borrowers excelled in areas that are historically important for this group including low- to average-credit score requirements, low lender fees and low interest rates.

The following is the weighting assigned to each category:

• Loan costs. 30%
• Speed. 20%
• Credit requirements. 20%
• Loan types offered. 20%
• Access and availability. 10%

Specific characteristics taken into consideration within each category include APR, average interest rate, origination fees, minimum credit score requirements, discounts and customer service availability.

We also offered bonus points up to 5% of the score when a lender considers alternative credit data.

To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Mortgage Lenders.

USDA loans are mortgages backed by the U.S. Department of Agriculture to encourage homeownership in designated rural areas. Interest rates on these loans tend to be lower than those offered on conventional loans, which helps make them more affordable.

A USDA loan allows home buyers with qualifying incomes to buy, build or repair a home in eligible rural areas.

Some of the best USDA loan benefits include:

• No down payment
• Fixed interest rates
• No cash reserves
• Sellers may cover closing costs
• Payment assistance for income-qualified borrowers

USDA loans can make it easier to secure affordable housing, although borrowers pay an upfront guarantee fee of 1% and an annual guarantee of 0.35% for the life of the loan. The lender will collect this expense through the monthly loan payment.

It’s also possible to refinance non-USDA home loans into this program.

If you want to apply for a USDA loan, follow these steps:

1. Check your credit. The USDA doesn’t have a set minimum credit score requirement. However, many lenders that offer these loans require a score of at least 640—though some accept lower scores than this. Either way, checking your credit beforehand is a good idea to see where you stand. You can use a site like AnnualCreditReport.com to review your credit reports for free. If you find any errors, dispute them with the appropriate credit bureau to potentially boost your credit score.
2. Find an eligible home. To get approved for a USDA loan, the home you want to purchase must be located in an eligible rural area. You can visit USDA.gov to research qualifying locations.
3. Compare lenders and pick a loan option. Be sure to shop around and compare your options from as many USDA lenders as possible to find the right loan for your needs. Afterward, choose the lender that works best for you.
4. Complete the application. You’ll need to complete a full application and submit required documentation, such as tax returns and bank statements. If further information is requested, provide it to the lender as quickly as possible to avoid delays.
5. Close on the loan. If approved, you can expect the closing process to take about 30 to 45 days, though sometimes it can be longer.

There are a few basic requirements that you must meet to get approved for a USDA loan.

• Citizenship. You must be a U.S. Citizen, U.S. non-citizen national, or an immigrant designated as a qualified alien.
• Maximum income. USDA loans are meant for low- and middle-income households. To be eligible, your income can’t exceed 115% of the median household income in your area. You can check with your lender or on USDA.gov to see the exact income limits you’ll need to meet.
• Primary household. The home must be the primary residence of the borrower.
• Eligible home location. The home must be in an eligible rural area.

The USDA doesn’t set credit score requirements for its home loans. However, USDA-approved mortgage lenders often require a minimum credit score of 640. The USDA also allows lenders to use alternative credit metrics for applicants with a thin credit history.

It’s possible to qualify for USDA home loans with a credit score lower than 640, although the underwriting process is more extensive. For instance, the manual underwriting process may take your existing rent or mortgage payments into consideration. Lenders may also request a letter of explanation regarding derogatory marks on your credit report.

Pros

• Up to 100% financing. Some lenders might still require a down payment, though.
• No specific minimum credit score. The USDA doesn’t have a fixed credit score requirement, though many lenders require a score of at least 640.
• Cash reserves are not required. Unlike other mortgages, you typically won’t need a set amount of cash reserves to be eligible for a USDA loan.
• Low interest rates. USDA loans often come with lower rates compared to rates on conventional loans.

Cons

• Income limitations. If your income exceeds 115% of the median household income in your area, you won’t be eligible for a USDA loan.
• Geography restrictions. The home you’re interested in must be located in a USDA-eligible rural area. If not, you’ll have to consider other types of loans.
• Mortgage insurance. Because USDA loans require little to no down payment, you might have to pay for mortgage insurance to help offset the lender’s risk. Unlike the private mortgage insurance (PMI) assigned to conventional loans, this insurance is generally charged as an annual guarantee fee. This comes in two parts: a 1% upfront guarantee fee and a yearly fee that equates to 0.35% of your loan balance.
• No duplexes. USDA loans are available only for single-family homes.

Like with any other type of mortgage, it’s important to take the time to find the right lender for you. To do so, compare your options from as many lenders that offer USDA loans as possible. If you know someone who has worked with a USDA lender, they might be able to provide a recommendation and more in-depth information.

As you shop around, consider interest rates, repayment terms, any fees charged by the lender, and eligibility requirements. This will help you find a good deal as well as identify a lender that suits your needs.

Two USDA loan programs are available for single-family home buyers and may not require a down payment or cash reserves. Income limits, repayment term, and the institution behind the loan are key differences.

How Do USDA Guaranteed Loans Work?

The USDA Section 502 Guaranteed Loan Program is the most common loan program with higher limits. It’s intended for borrowers with a low or moderate income not exceeding 115% of the area’s median household income.

This loan program only offers a 30-year repayment term and is available from approved USDA lenders.

How Do USDA Direct Loans Work?

The Section 502 Direct Loan program provides subsidized financing to very-low- and low-income households that may not qualify for other home loan programs.

Low-income borrowers are eligible for a payback period of 33 years while very-low-income households are eligible for a 38-year term.

Effective June 1, 2023, the maximum interest rate is 4%, although it can be as low as 1% with payment assistance. Aspiring homeowners must apply directly through USDA Rural Development instead of a private lender.

A USDA loan is worth it for home buyers with a limited income and cash reserves since the program doesn’t typically require any down payment. This loan type may also offer lower rates than conventional loans.

The most substantial drawbacks for most borrowers are the upfront and annual guarantee fees. Additionally, borrowers can be subject to narrow income limits to qualify.

Mortgages expert Josh Patoka contributed to this article.