Buying in Washington County with little or no savings for a down payment? You might not need one. USDA loans can open the door to homeownership in many parts of the county if you meet the rules. In this guide, you’ll learn how USDA financing works, who qualifies, how to check an address, what it costs, and the exact steps to get from pre‑approval to closing. Let’s dive in.
What a USDA loan covers
USDA’s Single‑Family Housing Guaranteed Loan Program helps approved lenders offer 0% down financing to eligible buyers purchasing a modest primary residence in an eligible area. Loans are 30‑year fixed and can be used to buy, build with construction‑to‑permanent, or rehabilitate a home tied to a purchase. You work with a private lender, and USDA provides the loan note guarantee to that lender. See the official program overview.
USDA also runs separate direct and repair programs for very‑low income households. If your income is too low for a guaranteed loan, a direct option may be possible through USDA’s state office. Review all single‑family programs.
Who qualifies in Washington County
Much of Washington County is within USDA‑eligible boundaries. Some denser corridors near Hagerstown are not. Always enter the exact property address in the USDA map before you write an offer. Use the official Eligibility and Income tool.
Income limits apply and are set by household size and area. For guaranteed loans, limits are generally up to 115% of the area median income. Use the tool above to confirm your current limit by household size before you assume eligibility.
Lenders set credit and debt‑to‑income standards. USDA does not publish a single minimum score, but many lenders look for scores in the low‑to‑mid 600s for automated approvals and will review your employment, income stability, and debts. You must plan to live in the home as your primary residence and meet citizenship or qualified‑alien requirements as defined by USDA.
For buyers watching affordability, public reports put recent Washington County median list prices in the low‑to‑mid $300Ks. That pricing, plus zero‑down financing, can help qualified buyers reach a modest single‑family home without a large upfront cash requirement. See market snapshot context.
Property rules you should know
- The home must be modest and used as your primary residence. Investment and vacation homes are not eligible.
- Single‑family detached or attached homes, some condos or PUDs, and certain manufactured or modular homes can qualify when they meet program and appraisal rules.
- Acreage has no strict cap if it is typical for the area and the property is not used for income‑producing purposes.
- The appraisal must support value and basic safety and habitability.
You or your agent should confirm eligibility for the exact parcel on the USDA map.
What it costs
- Down payment: 0% for eligible borrowers.
- Guarantee fees: USDA guaranteed loans typically include an upfront guarantee fee and a small annual fee collected monthly. Recent guidance shows an upfront fee of 1.00% of the loan amount and an annual fee of 0.35% of the outstanding balance. The upfront fee is often financed into the loan. Always confirm the current fiscal‑year fees. See USDA program notice example.
How it compares:
- FHA usually requires an upfront mortgage insurance premium and a higher annual premium than USDA for similar balances.
- Conventional may require PMI until you reach 20% equity.
- VA offers 0% down for eligible veterans but has a funding fee for many borrowers. For background on upfront mortgage insurance concepts, read this plain‑English explainer.
Step‑by‑step: How to use a USDA loan here
- Check the address first
- Enter the exact street address in the USDA Eligibility Map to confirm the parcel is in an eligible area. Tiny pockets can be ineligible even within the same zip code. Use the official tool.
- Confirm your household income
- Look up the current income limit for your household size in the Hagerstown/Washington County area using the same tool. Limits change, so check again before you shop.
- Get pre‑approved with a USDA‑approved lender
- Contact at least two lenders that do USDA guaranteed loans. Ask about their credit score minimums, debt‑to‑income guidelines, and whether they will finance the upfront guarantee fee. You can review lender participation info on USDA’s site and ask lenders directly. Start with USDA’s lender resources.
- Gather documents
- Be ready with photo ID, Social Security numbers, 2 years of W‑2s/1099s and tax returns, recent pay stubs, bank statements, and explanations for any credit events. Your lender may ask for more.
- Shop homes in eligible areas
- Focus on properties that meet program and appraisal standards. When you write an offer, include a financing contingency for USDA approval.
- Appraisal, underwriting, and USDA commitment
- Your lender orders the appraisal and underwrites the file. Once the loan meets guidelines, the lender requests USDA’s Conditional Commitment. You will receive clear terms and closing conditions.
- Close and move in
- If financed, the upfront guarantee fee is added to your loan. The annual fee is part of your monthly payment. After closing, your servicer handles payments and questions.
Quick buyer checklist
- Verify the property address on the USDA Eligibility Map. Open the tool.
- Check the current USDA income limit for your household size. Confirm limits here.
- Gather pay stubs, W‑2s/1099s, tax returns, bank statements, photo ID, and SSNs.
- Contact two USDA‑approved lenders for pre‑approval and compare terms. See lender resources.
- Keep a USDA financing contingency in your offer until eligibility and approval are verified.
Local help and contacts
If you think you may qualify for a USDA direct loan or have questions about state administration, contact the USDA Rural Development Delaware‑Maryland office. Find the DE‑MD State Office. For home shopping, neighborhood guidance, and contract strategy in Washington County, work with a local team that knows how to navigate USDA property and map rules.
Ready to take the next step? Reach out to Stacy Allwein for a friendly, no‑pressure consult and a personalized path to USDA pre‑approval and home shopping.
FAQs
What is a USDA guaranteed loan for Washington County buyers?
- A USDA guaranteed loan is a 30‑year fixed mortgage offered by approved lenders with 0% down for eligible buyers purchasing a modest primary residence in a USDA‑eligible area.
How do I check if a Washington County address is eligible?
- Enter the exact address in USDA’s online map tool; eligibility can change block by block, so always verify before making an offer.
What income limits apply in Washington County, MD?
- Limits vary by household size and are generally up to 115% of the area median income for guaranteed loans; use USDA’s tool to confirm the current figures.
What credit score do I need for a USDA mortgage?
- USDA does not set one national minimum, but many lenders look for scores in the low‑to‑mid 600s and will also evaluate your debts and income stability.
What USDA fees should I expect?
- Expect an upfront guarantee fee that is often financed into the loan and a small annual fee paid monthly; verify the current fiscal‑year rates with your lender.
How does USDA compare with FHA, VA, and conventional loans?
- USDA offers zero down with location and income rules; FHA is available anywhere but usually has higher mortgage insurance; VA is zero down for eligible veterans; conventional may need PMI until 20% equity.
