How to get a USDA Home Loan in Pennsylvania

House for saleUSDA loans, more often referred to as the USDA Rural Housing Loan Program, are 30-year fixed-rate mortgages targeted for first-time home buyers with low to moderate incomes.

The property must be situated in an area of Pennsylvania that has been approved by the USDA. A down payment is not required for a USDA mortgage loan (100 percent financing plus the guarantee fee). The USDA loan is a mortgage program that requires no money down. Purchasers are required to satisfy the PA's minimum income criteria (see below). The loan is "insured" by the United States Department of Agriculture. This USDA loan calculator can help you figure out how much you may borrow and how much you'll have to pay each month on your mortgage. 
USDA calculator

USDA income limits for Pennsylvania

The income limitations differ depending on where you live in Pennsylvania, the MSA you are in, and the size of your family.

Each spring, the USDA establishes new limitations (May or June typically). These ceilings are set at around 15% over the area's typical median family income.

As of May 12, 2021, the following are the standard income restrictions for the Single-Family Housing Guaranteed Loan Program:

Pennsylvania's standard base income limits for 2022 are as follows:

1-4-member household: $91,900
5-8-member household: $121,300

There are county-level exemptions for those with higher earnings. 
See USDA income limits

Annual income is calculated using the aggregate of all qualified (gross) income earned by all adult household members, not only mortgage holders. A family's income may be decreased as a consequence of the following:

  • Care of Household Members with Disabilities
  • Child Care Expenses
  • Dependents
  • Elderly Household
  • Medical Expenses
The USDA provides extensive information on income determination in Chapter 9 of the SFH Guaranteed Loan Program Technical Handbook

USDA loans and credit score and credit history

For manually underwritten loans, the USDA requires a 640 "middle" credit score, although there are many exceptions:

Credit score less than 640

According to USDA underwriting guidelines, underwriters (the approval person) must undertake a careful degree of underwriting. A comprehensive assessment of all aspects of the applicant's credit history should be performed to ascertain the applicant's willingness to repay and ability to meet agreed-upon obligations. A credit score in this range is often seen as a strong indication that the applicant lacks an acceptable credit history, unless mitigating circumstances are shown in accordance with this Chapter 10.

Little or no credit history:

If the applicant can show a willingness to fulfill recurring commitments through other acceptable means, such as third-party verification or canceled checks, the applicant's credit report's lack of credit history may be mitigated. Due to concerns about fairness, third-party verification from relatives of household members are not allowed. In line with Section 10.6 of this Chapter, lenders may produce a Non-Traditional Credit Report for applicants who do not have a credit score.

Indicators of creditworthiness that are too high.

The following indicators need documentation that complies with Section 10.8 criteria in order to accept an applicant's loan request for manually underwritten loans:

  • Foreclosure during the last three years: This includes any pre-foreclosure activity, such as a pre-foreclosure sale or short sale, that happened within the last three years (see to Attachment 10-B for further information).
  • Bankruptcy within three years:
  • a discharge of a Chapter 7 bankruptcy during the preceding three years;
  • If the applicant fulfills the requirements set out in Section 10.8 of this Chapter, a term of less than three years but not less than twelve months may be granted.
  • Chapter 13 bankruptcy in which repayment has not yet been finished (repayment plan is in process) or has been completed within the last 12 months.
  • Plans that last 12 months or longer do not need a credit exemption under Section 10.8.
  • Late mortgage payments if any mortgage trade line has had one or more 30-day payment defaults in the preceding 12 months.
  • Past-due rent payments of 30 days or more in the previous year.

Additional information on USDA credit requirements, including bankruptcy, foreclosure, and short sale approval, may be found in Chapter 10.


USDA qualifying areas

The residence must be located inside a USDA-designated area.
The USDA provides a search tool to determine if a property is located in a USDA-designated region. USDA area eligibility lookup

The nature, usage, and design of the property must be mostly residential.
The house may be connected, detached, or semi-detached, and must satisfy current USDA property standards.

Site size

There are no limitations on the property's acreage/size.
A home with an excessive amount of land that is more expensive than a similar property with less land may be unsuitable.
The appraiser must provide an addendum to the assessment describing how comparable properties have changed.

Income producing buildings

On the land, structures that are mainly used to produce revenue are not allowed.

No barns, silos, commercial greenhouses, or livestock facilities are eligible if they are primarily used for agricultural, farming, or commercial business production.

On the other hand, barns, silos, livestock facilities, or greenhouses that are no longer in use for commercial purposes and will be used for storage are not excluded.

Outbuildings such as storage sheds and non-commercial workshops are permitted as long as they are not primarily utilized for agricultural, farming, or commercial activities that generate revenue.

This criteria is not broken by a little source of income, such as caring to a garden for a small additional fee.

Daycare, product sales, and craft production are all examples of home-based companies that do not need particular commercial real estate features.
Additional information regarding property eligibility is available here.

Additionally, Chapter 12 discusses potable and waste water systems, as well as street access and road maintenance.


The USDA loan program is approved by the Pennsylvania Housing Finance Agency as part of the Keystone Government Loan Program (PHFA). The government loan for Keystone offers the benefit of a lower interest rate and access to the Keystone Assistance Program (subject to PHFA guidelines).

The maximum amount of assistance is 4% of the purchase price, up to a maximum of $6,000.

There are no limitations on first-time home purchasers under the Keystone Government or Keystone Assistance programs.

USDA Home Loan Frequently Asked Questions

Q. Are there any closing fees associated with a USDA loan?
A. USDA home loans include closing fees, however there is no necessary down payment (100 percent financing), and the house seller may pay up to 6% of the buyer's closing expenses.

Q. Are USDA loans a poor investment?
A. The USDA home loan program is an excellent option if you satisfy the income and area criteria. There is a 1% upfront financing cost and a monthly mortgage insurance charge. Regrettably, the monthly mortgage insurance premiums never decrease, even if the loan amount falls below 80% of the home's value.

Q. Is it difficult to close USDA loans?
A. USDA lending requirements are identical to those for FHA loans.
USDA loans typically take between 30 and 45 days to process.
The length of time required to complete a USDA loan varies according on the applicant's readiness and the appraiser's schedule.

Q. Are USDA loans difficult to obtain?
A. USDA loans adhere to FHA standards.
USDA loans are somewhat more restricted than conventional loans, but not so much so that the loan should be disregarded.

Q. Are USDA loans a good investment?
A. The USDA loan is really a better option than an FHA loan, since it requires less upfront mortgage insurance and also has a lower monthly mortgage insurance cost.
The significant distinction is in the income and location criteria.

Q. Can I use a USDA loan to purchase a fixer upper?
A. The USDA loan is not meant for renovations of any kind, whether small or large.
The FHA 203(k) loan program is intended for the purpose of purchasing and rehabbing a property.

Q. Are USDA loans popular with sellers?
A. I believe many house sellers are unaware of USDA loans.
They often follow the real estate agent's advice.

Q. Is it necessary to be a first-time home buyer to qualify for a USDA loan?
A. USDA loans do not have a first-time home buyer requirement.

Q. Are you required to repay a USDA loan?
A. Yes

Q. How do you determine whether or not a house is USDA approved?
A. As stated before

Read more about USDA home loans at