USDA Loans, zero down on the edges of the Houston metro.

A USDA loan is guaranteed by the U.S. Department of Agriculture through its Rural Development programme, and it's the only widely available mortgage besides VA that asks for no down payment at all. The word rural does more work in the name than it does in practice: eligibility is drawn by map, and the boundary sits closer to Katy than most people expect. Land west and north of the Grand Parkway, out toward Brookshire and into Waller County, contains a good deal of eligible ground, and the same is true at several other edges of the Houston metro. It's worth checking an address rather than assuming, because the answer is binary and it changes street by street.

The Two Eligibility Tests

There are two tests, and a file has to pass both. The property must sit inside an eligible area on USDA's map. The household must fall within the income limit for its county and size, generally 115% of area median income, and that calculation counts everyone in the household rather than just the people on the loan - which catches applicants out more often than the map does. Instead of mortgage insurance, USDA charges a guarantee fee: a percentage of the loan financed upfront, plus a much smaller annual fee collected monthly. Both are set by USDA and adjusted periodically, and both are materially cheaper than FHA's equivalent, which is what makes the programme so strong for the households that qualify.

If you would like to explore whether a USDA loan matches your purchase price, credit profile and long-term budget, reach out to 3E Lending to speak with our licensed Texas mortgage team in Katy.