Texas USDA Loans 2026
USDA-eligible areas across Texas, income limits by county, zero-down financing requirements, and how to use USDA rural housing loans in markets near Houston, San Antonio, Dallas, and Austin.
USDA-Eligible Areas in Texas
Texas has enormous USDA-eligible territory. While the major urban cores — Houston, Dallas, Austin, San Antonio, El Paso — are excluded, the vast majority of Texas land area qualifies for USDA Rural Development financing. Many suburban and exurban communities within commuting distance of major cities retain USDA eligibility.
| Metro Area | Core City Eligible? | USDA Access Near This Market |
|---|---|---|
| Houston | No — Harris County core excluded | Many outer suburbs: Montgomery County, Liberty County, Waller County, Fort Bend outer areas |
| Dallas-Fort Worth | No — urban core excluded | Parker County, Hood County, Kaufman outer areas, Wise County communities |
| Austin | No — Travis County core excluded | Bastrop County, Lee County, Milam County, Burnet County |
| San Antonio | No — Bexar County core excluded | Atascosa County, Wilson County, Medina County communities |
| El Paso | Partially excluded | Outer El Paso County areas; New Mexico border communities |
| Small cities / rural TX | Often fully eligible | Lubbock outer areas, Abilene suburbs, East Texas, South Texas, Panhandle |
USDA Loan Requirements in Texas
| Requirement | USDA Standard | Texas Notes |
|---|---|---|
| Property location | Must be in USDA-eligible area | Most non-urban Texas qualifies; verify at eligibility.sc.egov.usda.gov |
| Min credit score | 640 (GUS approval) | Scores below 640 require manual underwrite; limited TX lenders offer manual USDA |
| Down payment | 0% | Guarantee fee (1%) may be financed into the loan |
| Income limit | 115% of Area Median Income | Varies significantly by county — see income limits table below |
| Income type | All household income counted | All adults living in the home must be included in income calculation |
| Property type | Single-family, modest size | Primary residence only; no investment properties; must meet USDA condition standards |
| Upfront guarantee fee | 1.0% of loan amount | Typically financed into the loan; not paid out of pocket |
| Annual fee | 0.35% of loan balance/year | Paid monthly ($29/mo per $100K borrowed); lower than FHA MIP |
| Citizenship | US citizen or eligible non-citizen | Standard requirement |
USDA Income Limits by Texas Region (2026)
USDA income limits are set at 115% of Area Median Income and vary by county and household size. The figures below are approximate — always verify current limits at the USDA Income Eligibility site or with your lender.
| County / Region | 1–4 Person Household | 5–8 Person Household |
|---|---|---|
| Most rural Texas counties | ~$110,650 | ~$146,050 |
| Houston outer suburbs (Montgomery, Waller, Liberty) | ~$112,450 | ~$148,450 |
| DFW outer areas (Parker, Hood, Wise) | ~$114,650 | ~$151,350 |
| Austin-adjacent (Bastrop, Burnet, Lee) | ~$116,700 | ~$154,050 |
| San Antonio outer (Atascosa, Wilson, Medina) | ~$110,650 | ~$146,050 |
| Lubbock, Abilene, Amarillo areas | ~$110,650 | ~$146,050 |
USDA vs. FHA in Texas
| Factor | USDA Loan | FHA Loan |
|---|---|---|
| Down payment | 0% | 3.5% |
| Geographic restriction | USDA-eligible areas only | No restriction — any location |
| Upfront fee | 1.0% guarantee fee | 1.75% MIP |
| Annual/monthly fee | 0.35%/year | 0.55%/year (life of loan) |
| Income limit | 115% of AMI — household income | None |
| Min credit score | 640 (GUS); manual possible below | 580 (3.5% down) |
| Loan limit | No formal cap (income/DTI limits purchasing power) | $541,287 most TX counties |
| Best for Texas buyers | Rural/suburban buyers meeting income limits, 640+ credit, 0% down | Urban buyers; lower credit; no geographic restrictions |
USDA wins on monthly cost in eligible areas. At 0.35%/year versus FHA’s 0.55%/year, USDA saves approximately $58/month on a $350,000 loan. Combined with no down payment requirement, USDA is often the strongest program for rural and suburban Texas buyers who meet the income limit and area requirements.
How to Apply for a Texas USDA Loan
- Verify property eligibility — Use eligibility.sc.egov.usda.gov to confirm the address is in a USDA-eligible area before proceeding.
- Calculate household income — Include ALL adult household members’ income, not just the borrowers.
- Check income limits — Confirm your county’s current 115% AMI limit at the USDA Income Eligibility portal.
- Check credit score — 640+ for automated approval; some lenders offer manual underwriting below 640.
- Find a USDA-approved lender — Not all Texas lenders originate USDA loans. Ask specifically whether the lender has active USDA experience.
- Get pre-approved — The lender submits your file to USDA’s Guaranteed Underwriting System (GUS) for an automated eligibility determination.
- Make an offer — Include address verification in your process; confirm USDA eligibility before going under contract.
- USDA conditional commitment — After lender approval, USDA must issue a conditional commitment before closing. Factor in additional processing time (typically 2–5 business days).
Texas USDA Loan FAQs
Yes. While the Houston city core and Harris County urban areas are excluded, significant USDA-eligible territory exists within commuting distance. Montgomery County (The Woodlands outer areas, Conroe suburbs), Liberty County, Waller County, and outer areas of Fort Bend County commonly retain USDA eligibility. Galveston County’s rural communities and Brazoria County outer areas may also qualify. Use the USDA eligibility map at eligibility.sc.egov.usda.gov to check specific addresses — eligibility is determined street by street, not by county.
Yes, in eligible areas. Bexar County’s urban core is excluded, but surrounding counties offer USDA-eligible properties within reasonable commuting distance of San Antonio. Atascosa County (Pleasanton, Jourdanton), Wilson County (Floresville), Medina County (Hondo, Castroville), and portions of Guadalupe County outside Seguin’s urban boundary commonly qualify. These areas are well-suited for military families at JBSA looking for affordable rural properties with zero down payment financing.
Yes — Texas property taxes apply statewide regardless of loan type or rural location. Even in rural Texas counties, effective property tax rates of 1.4–1.8% are common. On a $250,000 rural Texas home, annual taxes of $3,500–$4,500 add roughly $290–$375/month to your PITI payment. This reduces how much home you qualify for compared to states with lower tax rates. Apply for the homestead exemption after closing — the $100,000 school district exemption applies in all Texas counties and can save $500–$1,200/year depending on the local school district tax rate.
