USDA loans are made on properties within a qualifying rural area. USDA is the agency that offers the loan program. Rural Development (or RD) is the name of the product offered and is sometimes referred to as Farm Loans. The property must be located in a USDA qualifying area which can be found using the USDA website.
Applicants with very low to moderate incomes typically can qualify for these loans but must meet a strict Debt-to-income ratio requirement, along with a residual income qualification (Money left over after all debts are paid monthly). There are income and asset requirements. The total household income of adult members is considered as well as any children, or disabled persons in the home.
USDA loans require an upfront guarantee fee and an annual guarantee fee, similar to upfront mortgage insurance (UFMIP) and monthly mortgage insurance (MIP) for FHA loans. These guarantee fees are generally lower than mortgage insurance premiums for FHA.