USDA loans

The US Department of Agriculture backs loans for buyers in eligible areas, with the goal of supporting homeownership outside densely populated places. Like VA loans, they can require no down payment for qualifying borrowers.

The program also sets income limits, which are designed to keep the benefit aimed at moderate-income households. Both the area rules and the income rules are specific, and both are confirmable.

This is the part that surprises people. USDA eligibility is not limited to farmland and small towns. Many communities on the outer edges of Wayne, Oakland and Macomb counties fall inside eligible areas.

So if you are considering a home outside the urban core — even in what feels like a suburb — it is worth checking whether the property is in an eligible area. It costs nothing to ask, and the answer is occasionally a very pleasant one.

USDA loans carry a program fee, similar in spirit to the VA funding fee, which is often financed into the loan. There is also an annual fee collected with the payment.

The income limits mean a household earning above the threshold will not qualify, even in an eligible area. Those thresholds change over time, so the answer worth having is the current one.

USDA is one of the less-discussed options, which is exactly why it is worth raising. A borrower who assumes it is only for farms may be leaving a genuine option on the table.

If you are shopping outside the city and you have not heard it mentioned, ask. It is a short question with a specific answer.