USDA Loan Income Limits

USDA Income Limits

Welcome to the USDA Income Limit page. Probably one of the most important pages, because, as a homebuyer, you must be under the county income limit to qualify for a USDA Guaranteed Loan.

The USDA Guaranteed Single Family Housing Program was designed to assist homebuyers, with moderate or low income, to purchase a home with No Money Down in rural and semi-rural areas. For this reason, homebuyers are required to be under the income limit for the county they are looking to purchase in.

USDA income limits vary by location and household size, and the program is generally available to homebuyers whose household makes no more than 115% of the median income for the area where the property is located.

How Are USDA Income Limits Determined?

Before you try and calculate the income limits yourself, the official median income for all parts of the United States is tallied by the United States Census Bureau and is also reported by USDA Rural Development.

Finding the median income is relatively easy; however, knowing how to count qualifying income can be difficult. Sometimes borrowers, and even inexperienced USDA lenders, miscalculate income and deem themselves ineligible for a USDA loan, when in fact they may be eligible.

Additionally, there are adjustments for the number of those living in the property. USDA income limits are different for a home with 1-4 occupants then a home with 5+ residents.

For a family of 1-4 members, the income limit for most areas is $75,650, and can go up to $153,400 in high cost cities. The greater number of household members increases the income limit for that family.

In 2018 USDA increased the income limit for many counties across the United States. So, just because the limit is $75,650 for one county, may not be the limit for the county you are looking to purchase in.

Don’t worry, you don’t have to figure out the formula to calculate this on your own. We have already calculated the income limits for you, all you have to do is click below on the State you are looking to purchase in and then select your county. Follow the prompts to look up the income limit for your county.


 

If you are over the income limit and want to see if you qualify for deductions to lower your total gross household income, please complete our quick Getting Started form and a USDA specialist will assist you in calculating income and deductions.

(Note: You can find out costs and calculations by visiting our Mortgage Amortization Calculator page and our USDA Loan Payment Calculator page.)

Who All is Included in the Gross Household Income Calculation?

All who will be living in the property over the age of 18, and working, will be included in the gross median household income calculation. Even those who aren’t officially on the loan application. Family members’ income will be counted towards gross household income limit however, their income will not be used for the loan.

If a spouse is not working, USDA will request a letter from the spouse stating they are not currently working. If a dependent is enrolled in college full time and is not working, they can also provide a letter stating they are not currently working.

The 115% qualifier is an easy way to make a quick determination, but it’s important to understand there are many intricacies involved in counting income.

When determining income, it is best to speak with a USDA loan specialist. USDA loan specialists know how to properly count your income and determine if you qualify. You’ll be asked to provide your most recent pay check stubs, W2s and your income tax returns if you’re self-employed or receive income from sources other than your job.

What Income is Included in Gross Household Income Calculation?
Projected year to date gross household income will be calculated to verify the household is under the USDA income limit for that county.

  • W2 income
  • Salary
  • 1099 income
  • Commission
  • Tips
  • Overtime
  • Bonus
  • Housing allowance
  • Self-employment income
  • Farming income
What is NOT Included in Household Income Calculation?
Be prepared by reviewing income documents in advance with your USDA loan specialist.

  • Income earned from a dependent under the age of 18
  • Section 8 housing assistance
  • Income from live in nurse or live in aids
  • Future non-documented income