USDA Eligible Areas in Texas: Rural Home Buying Guide

USDA home loans, backed by the U.S. Department of Agriculture’s Rural Development programs, offer an ideal pathway for purchasing homes in rural and suburban areas of Texas. This guide explores the latest USDA boundaries in Texas, program eligibility, and practical steps for a smooth loan application.

What Makes an Area USDA-Eligible?

USDA defines rural areas based on population and mortgage availability:

• (a) Population ≤ 10,000
  
• (b) 10,001–20,000, non‑metropolitan area, with limited mortgage access
  
• (c) 20,001–35,000, once rural (pre‑1990/2000/2010 census), still low on credit access
  

In Texas, approximately 97% of land area qualifies as rural and USDA-eligible – only around 4.5% is ineligible . This means you’re likely to find USDA zones even near metro outskirts.

Where Are USDA‑Eligible Areas in Texas?

To locate eligible areas:

1. Visit the USDA property eligibility site.
   
2. Enter your street address and zip code. Omit state/city if errors occur.
   
3. View the map: Red = ineligible, White = eligible.

Commonly eligible regions include:

• Houston suburbs
  
• Dallas–Fort Worth outskirts
  
• San Antonio and Austin peripheries
  
• Small towns (<30,000 residents)
  

USDA Loan Types in Texas

Guaranteed Loan (Section 502 Guaranteed)

• 100% financing via approved lenders
  
• For low-to-moderate income (≤ 115% of AMI)
  
• Requires credit score ≈ 620+, DTI ≤ 41‑44%
  

Direct Loan (Section 502 Direct)

• For very low to low-income borrowers (≤ 80% AMI)
  
• Government-funded, with rates ~4.875% (as of June 1, 2025)
  

Home Repair & Grants (Section 504)

• Loans/grants (≤ $10K) to fix or modernize rural homes
  

Income & Credit Eligibility in Texas

• Household income must be:
  
  • ≤ 115% AMI for Guaranteed loans
    
  • ≤ 80% AMI for Direct loans
    
• Example AMIs (4‑person household) :
  

• 
  Credit Score: Minimum ≈ 620; 640+ improves rates
  
• DTI: ≤ 41–44%
  

Property Requirements

Eligible properties must be:

1. USDA‑eligible location
   
2. Primary residence (no rentals/farms/investments)
   
3. Safe and sound: structurally sound, basic plumbing/heating, paved access
   
4. Modest in size/design, new or existing (including manufactured homes on permanent foundations)
   

Benefits of USDA Loans

• 100% financing, no down payment
  
• Low fixed interest rates
  
• No mortgage insurance (unlike FHA)
  
• Flexible credit requirements — ideal for first-time or moderate-credit borrowers
  
• Supports growth in rural Texas
  

Step-by-Step Application Guide

1. Get pre-qualified: Income, credit, DTI check
   
2. Verify property eligibility on USDA map
   
3. Find an approved USDA lender
   
4. Submit full application and documentation
   
5. Underwriting & appraisal (property must meet standards)
   
6. Close the loan (often within 1–2 months)
   

See our USDA Loan Pre‑Approval Checklist for documents needed.

FAQ

Read Next

• USDA Loans in Indiana A Complete Guide
• USDA Loan Requirements Eligibility for Rural Home Buyers
  

Conclusion

With nearly all of Texas’s rural landscape qualifying, USDA loans offer a powerful opportunity for first-time buyers and modest-income families to secure affordable homeownership. By verifying your region, meeting income and property standards, and working with knowledgeable lenders, you can take full advantage of no‑down‑payment, low‑rate USDA financing.

Start your journey now — Check eligibility, get pre‑approved, and make your rural Texas dream a reality!