Alabama USDA Loans

What are Alabama USDA Home Loans?

USDA stands for United States Department of Agriculture. Alabama USDA rural development provides a low-cost insured home mortgage loan that suits a variety of options. In fact, a USDA mortgage is likely the best home loan option if you want to purchase a home with no down payment. If you’re unsure about your credit rating, or have concerns about a down payment when you’re doing a home loan comparison, USDA Rural Mortgage Loans can give you piece of mind with zero-down, super low closing costs and low monthly mortgage insurance.

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.

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).

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.

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Alabama USDA Loan Adjusted Maximum Income Limits by County
Updated 05/01/2009

County Name
1-4 Person Households
(Guaranteed Loans)
5-8 Person Households 
(Guaranteed Loans)
AUTAUGA
$73,600
$97,150
MONTGOMERY, AL (MSA)
BALDWIN
$73,600
$97,150
DAPHNE-FAIRHOPE, AL (MICRO)
BARBOUR
$73,600
$97,150
EUFAULA, AL-GA (MICRO)
BIBB
$73,600
$97,150
BIRMINGHAM-HOOVER, AL (MSA)
BLOUNT
$73,600
$97,150
BIRMINGHAM-HOOVER, AL (MSA)
BULLOCK
$73,600
$97,150
NON-METRO
BUTLER
$73,600
$97,150
NON-METRO
CALHOUN
$73,600
$97,150
ANNISTON-OXFORD, AL (MSA)
CHAMBERS
$73,600
$97,150
VALLEY, AL (MICRO)
CHEROKEE
$73,600
$97,150
NON-METRO
CHILTON
$73,600
$97,150
BIRMINGHAM-HOOVER, AL (MSA)
CHOCTAW
$73,600
$97,150
NON-METRO
CLARKE
$73,600
$97,150
NON-METRO
CLAY
$73,600
$97,150
NON-METRO
CLEBURNE
$73,600
$97,150
NON-METRO
COFFEE
$73,600
$97,150
ENTERPRISE-OZARK, AL (MICRO)
COLBERT
$73,600
$97,150
FLORENCE-MUSCLE SHOALS, AL (MSA)
CONECUH
$73,600
$97,150
NON-METRO
COOSA
$73,600
$97,150
ALEXANDER CITY, AL (MICRO)
COVINGTON
$73,600
$97,150
NON-METRO
CRENSHAW
$73,600
$97,150
NON-METRO
CULLMAN
$73,600
$97,150
CULLMAN, AL (MICRO)
DALE
$73,600
$97,150
ENTERPRISE-OZARK, AL (MICRO)
DALLAS
$73,600
$97,150
SELMA, AL (MICRO)
DE KALB
$73,600
$97,150
FORT PAYNE, AL (MICRO)
ELMORE
$73,600
$97,150
MONTGOMERY, AL (MSA)
ESCAMBIA
$73,600
$97,150
NON-METRO
ETOWAH
$73,600
$97,150
GADSDEN, AL (MSA)
FAYETTE
$73,600
$97,150
NON-METRO
FRANKLIN
$73,600
$97,150
NON-METRO
GENEVA
$73,600
$97,150
DOTHAN, AL (MSA)
GREENE
$73,600
$97,150
TUSCALOOSA, AL (MSA)
HALE
$73,600
$97,150
TUSCALOOSA, AL (MSA)
HENRY
$73,600
$97,150
DOTHAN, AL (MSA)
HOUSTON
$73,600
$97,150
DOTHAN, AL (MSA)
JACKSON
$73,600
$97,150
SCOTTSBORO, AL (MICRO)
JEFFERSON
$73,600
$97,150
BIRMINGHAM-HOOVER, AL (MSA)
LAMAR
$73,600
$97,150
NON-METRO
LAUDERDALE
$73,600
$97,150
FLORENCE-MUSCLE SHOALS, AL (MSA)
LAWRENCE
$73,600
$97,150
DECATUR, AL (MSA)
LEE
$73,600
$97,150
AUBURN-OPELIKA, AL (MSA)
LIMESTONE
$73,600
$97,150
HUNTSVILLE, AL (MSA)
LOWNDES
$73,600
$97,150
MONTGOMERY, AL (MSA)
MACON
$73,600
$97,150
TUSKEGEE, AL (MICRO)
MADISON
$73,600
$97,150
HUNTSVILLE, AL (MSA)
MARENGO
$73,600
$97,150
NON-METRO
MARION
$73,600
$97,150
NON-METRO
MARSHALL
$73,600
$97,150
ALBERTVILLE, AL (MICRO)
MOBILE
$73,600
$97,150
MOBILE, AL (MSA)
MONROE
$73,600
$97,150
NON-METRO
MONTGOMERY
$73,600
$97,150
MONTGOMERY, AL (MSA)
MORGAN
$73,600
$97,150
DECATUR, AL (MSA)
PERRY
$73,600
$97,150
NON-METRO
PICKENS
$73,600
$97,150
NON-METRO
PIKE
$73,600
$97,150
TROY, AL (MICRO)
RANDOLPH
$73,600
$97,150
NON-METRO
RUSSELL
$73,600
$97,150
COLUMBUS, GA-AL (MSA)
SHELBY
$73,600
$97,150
BIRMINGHAM-HOOVER, AL (MSA)
ST. CLAIR
$73,600
$97,150
BIRMINGHAM-HOOVER, AL (MSA)
SUMTER
$73,600
$97,150
NON-METRO
TALLADEGA
$73,600
$97,150
TALLADEGA-SYLACAUGA, AL (MICRO)
TALLAPOOSA
$73,600
$97,150
ALEXANDER CITY, AL (MICRO)
TUSCALOOSA
$73,600
$97,150
TUSCALOOSA, AL (MSA)
WALKER
$73,600
$97,150
BIRMINGHAM-HOOVER, AL (MSA)
WASHINGTON
$73,600
$97,150
NON-METRO
WILCOX
$73,600
$97,150
NON-METRO
WINSTON
$73,600
$97,150
NON-METRO

 USDA Loan information for Alabama’s top cities:

Birmingham Alabama USDA LoansMontgomery Alabama USDA LoansMobile Alabama USDA Loans
Huntsville Alabama USDA LoansTuscaloosa Alabama USDA LoansHoover Alabama USDA Loans
Dothan Alabama USDA LoansDecatur Alabama USDA LoansAuburn Alabama USDA Loans
Gadsden Alabama USDA LoansFlorence Alabama USDA LoansBessemer Alabama USDA Loans
Madison Alabama USDA LoansPrichard Alabama USDA LoansPhenix City Alabama USDA Loans
Homewood Alabama USDA LoansVestavia Hills Alabama USDA LoansPrattsville Alabama USDA Loans
Anniston Alabama USDA LoansOpelika Alabama USDA LoansCenterpoint Alabama USDA Loans

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