COLORADO USDA MORTGAGE PROGRAMS (RD)
USDA residential loans are zero-down mortgages for low to moderate-income households either refinancing a current USDA loan or purchasing a home within the allowed rural locations in Colorado. USDA mortgages are zero down 100% loans. There are two types of residential USDA loans – the 502 GUARANTEED and 502 DIRECT.
The Direct program is intended for low-income households and offers incredible incentives. The income limits are very strict although with rising home prices, limits have become more lenient and may be a great option for some borrowers. Borrowers interested in the 502 Direct program must apply directly with USDA. Banks do not originate 502 Direct loans. More details below.
The majority of homebuyers will most likely be looking at the Guaranteed program which offers more lenient income limits and a much easier loan process.
For the most part, if a property is not located in a Major Metro Area, there is a good chance it will qualify for a USDA mortgage. Most areas outside of Denver, Colorado Springs, and Grand Junction will be eligible. Even some parts of the outskirts of these 3 major Cities will be eligible.
It is important to understand that USDA takes into consideration household income even if an individual living in the home is not going on the mortgage. This is very important when an applicant is calculating their income to see which program they are eligible for.
USDA 502 GUARANTEED PROGRAM HIGHLIGHTS (MODERATE INCOME)
- Lenient income limits. See chart below.
- 100% Financing | Zero down.
- 30-year fixed loan.
- Competitive interest rates.
- Requires 620+ credit score.
- Discounted monthly mortgage insurance compared to FHA and conventional loans.
- Must occupy the property as a primary residence.
- No maximum loan amount.
| COLORADO USDA GUARANTEED 2023 HOUSEHOLD INCOME LIMITS | ||
| County | 1-4 Person | 5+ Person |
| Boulder | $138,300 | $182,550 |
| Fort Collins | $130,650 | $172,450 |
| Greeley | $120,550 | $159,150 |
| Eagle | $136,050 | $179,600 |
| La Plata | $119,540 | $157,650 |
| Pitkin | $131,450 | $173,500 |
| Routt | $124,550 | $164,400 |
| Summit | $127,450 | $168,250 |
| All Other Counties | $118,150 | $155,950 |
HOW TO APPLY FOR THE USDA GUARANTEED PROGRAM
Contact us to discuss your situation and see which program will be the best fit. We also encourage you to visit the USDA portal which offers a self-assessment tool that may help guide you in the right direction. If you believe you are on the cusp of qualifying, our USDA Guaranteed income page offers some additional details on possible deductions that may help with qualifying.
USDA 502 DIRECT PROGRAM HIGHLIGHTS (LOW INCOME)
- Strict income limits. Intended for low and very-low income households. See chart below.
- 100% Financing | Zero down.
- 33-year fixed loan up to 38 years for very low-income household.
- Subsidized mortgage. The monthly payment/interest rate is adjusted based on income.
- Current interest rate is 4.75% as of December 2023.
- Typically requires 640+ credit score.
- No mortgage insurance + Limited/zero closing costs.
- Must apply directly through USDA. Lenders DO NOT OFFER USDA Direct loans.
- Must occupy the property as a primary residence.
| COLORADO USDA DIRECT 2023 HOUSEHOLD INCOME LIMITS | ||
| County | 1-4 Person | 5+ Person |
| Boulder | $96,200 | $127,000 |
| Fort Collins | $90,900 | $120,000 |
| Greeley | $83,850 | $110,700 |
| Eagle | $94,650 | $124,950 |
| La Plata | $83,100 | $109,700 |
| Pitkin | $91,450 | $120,700 |
| Routt | $86,650 | $114,400 |
| Summit | $88,650 | $117,000 |
| Teller | $74,900 | $98,850 |
| Cheyenne | $72,300 | $95,450 |
| Garfield | $79,350 | $104,750 |
| Grand | $74,650 | $98,550 |
| Ouray | $74,500 | $98,350 |
| Rio Blanco | $71,350 | $94,200 |
| San Miguel | $79,750 | $105,250 |
| All Other Counties | $69,600 | $91,850 |
HOW TO APPLY FOR THE USDA DIRECT PROGRAM
To apply for the USDA Direct program, there are 3 options available:
Option 1. Contact a USDA intermediary so they can guide you through the process. Intermediaries are typically local nonprofit government agencies and approved government housing authorities. List of qualified USDA Direct government agencies.
Option 2. Apply online through the USDA portal. Register and create an account.
Option 3. Schedule an appointment with a local USDA office.
Before you attempt to apply for the USDA direct program, we encourage you to speak with us first so we can evaluate your situation to see which program you will be eligible for. The process to apply for USDA Direct is completely different than the traditional loan process of applying with a lender. We can analyze your income to see if applying for the USDA direct loan will be worth your time and effort.
