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Iowa USDA Loans

Iowa Mortgage Guides

Iowa USDA Loans 2026

No down payment across most of rural Iowa — the eligible areas, the FY2026 income limits, and the fees that replace a down payment.

📖 8 min readUpdated September 2026Iowa
$0Down payment required
$122,800Base income limit, 1–4 person household
1%Upfront guarantee fee
0.35%Annual fee

USDA eligible areas in Iowa

USDA’s Single Family Housing Guaranteed Loan Program is built for rural areas, and Iowa is overwhelmingly rural by USDA’s definition. Of the state’s 99 counties, the large majority fall outside any metropolitan statistical area entirely.

What is not eligible is easier to describe than what is. The built-up cores of Des Moines and West Des Moines, Cedar Rapids, Davenport, Sioux City, Waterloo, Iowa City, Dubuque, Ames and Council Bluffs are generally excluded, while smaller communities and the countryside around those cities usually qualify. Eligibility is set by address, not by county — two homes a few miles apart can get different answers.

Check the specific property before you make an offer. USDA publishes an address-level map at the USDA property eligibility site. A neighbouring town qualifying tells you nothing about the house you want.

Iowa USDA income limits

USDA caps household income at a moderate-income threshold that varies by area. Most of Iowa sits at the national base figure, with ten areas set higher.

Area1–4 person household5–8 person household
Most Iowa counties (base)$122,800$162,100
Ames area (Story County)$142,450$188,050
Iowa City area (Johnson County)$139,600$184,300
Des Moines–West Des Moines area$133,850$176,700
Council Bluffs area (Omaha metro)$131,100$173,100
Benton County$130,100$171,750
Boone County$129,150$170,500
Dickinson County$126,650$167,200
Sioux County$126,300$166,750
Bremer County$124,550$164,450

Income is measured across the whole household, not just the borrowers, and USDA adds 8% of the four-person limit for each person beyond eight. Figures are FY2026 and are published by USDA Rural Development.

USDA loan requirements

  • No down payment. USDA finances up to 100% of the appraised value.
  • The property must be in an eligible rural area and be your primary residence.
  • Household income must fall within the applicable limit above.
  • USDA publishes no program minimum credit score. 640 is USDA’s automated-underwriting cutoff; lower scores need manual review.

In place of mortgage insurance, USDA charges two fees: an upfront guarantee fee of 1% of the loan amount, usually financed into the loan, and an annual fee of 0.35% collected monthly. Both are well below FHA’s equivalent, which is why USDA is often the cheapest option for an Iowa buyer who qualifies.

How to apply

  • Check the property address on USDA’s eligibility map before making an offer.
  • Total your whole household’s income and compare it against the limit for that county.
  • Find a lender approved for the Guaranteed program — not every Iowa lender participates.
  • Expect a slightly longer timeline than FHA or conventional, since the file goes to USDA for a conditional commitment after the lender approves it.

Iowa USDA loan FAQs

What is the USDA income limit in Iowa?
$122,800 for a 1–4 person household in most Iowa counties, and $162,100 for 5–8 people. Nine areas are set higher, topping out at $142,450 in the Ames area. Income counts for the entire household, not just the borrowers.
Which parts of Iowa qualify for a USDA loan?
Most of the state. The built-up cores of the larger cities are generally excluded, while smaller towns and rural areas usually qualify. Eligibility is determined by the specific property address, so always check the USDA map before making an offer.
Do USDA loans require a down payment in Iowa?
No. USDA finances up to 100% of the appraised value. Instead of a down payment you pay a 1% upfront guarantee fee, which can be financed into the loan, and a 0.35% annual fee collected monthly.
What credit score do I need for a USDA loan in Iowa?
USDA sets no program minimum. 640 is USDA’s automated-underwriting cutoff; lower scores need manual review. Below that, manual underwriting is possible but far less common.