Understanding USDA Loan Income Limits and How They Work

What USDA income limits mean for your loan

USDA loans have income limits based on where you live and how many people are in your household. If your household income is above the limit for your county, you cannot get a USDA loan, no matter how strong the rest of your application is. The limit exists because USDA loans are meant for rural borrowers with low to moderate incomes.

Income limits change every year and vary significantly by location. A household income that disqualifies you in one county might be well under the limit in a neighboring county. The USDA updates these limits each spring, so a limit that applied last year may not apply this year.

Your household income includes wages, self-employment income, rental income, Social Security, disability payments, child support, and most other regular money coming in. It does not include one-time payments like insurance settlements or tax refunds.

Key Takeaways

• USDA income limits are set by county and household size, and they change every year in the spring.
• Your household income must fall at or below the limit for your county to move forward with a USDA loan.
• You can find your county's current limit on the USDA Rural Development website or by calling your local USDA office.
• If your income is above the limit, you may still be able to borrow through a conventional loan or FHA loan instead.

How to find your county's income limit

The USDA Rural Development website has an income limit lookup tool where you enter your state and county. The tool shows the limit for a one-person household, a two-person household, and so on up to eight or more people. You match your household size to find your limit.

If you cannot find your county on the website or the tool is not working, call your local USDA Rural Development office directly. They can tell you the current limit over the phone and answer questions about whether your specific income counts toward the total.

Keep the income limit number handy when you talk to a lender. Some lenders will do a preliminary check to confirm you are within range before you spend time on a full application.

What counts as household income

Household income includes all regular money earned by people living in the home. This covers W-2 wages, self-employment income, rental income from property you own, Social Security, SSI, disability payments, unemployment benefits, child support, alimony, and pension or retirement income.

Income does not include one-time money like tax refunds, insurance payouts, or gifts. It also does not include money from a reverse mortgage or a home equity line of credit. If you receive money from a trust or inheritance, ask your lender whether it counts — the answer depends on whether it is ongoing or a one-time payment.

If you are self-employed, the USDA looks at your average income over the past two years, not just your most recent year. If you recently started a business, they may ask for a business plan or tax projections.

Income limits by household size

USDA income limits increase with household size. A three-person household has a higher limit than a one-person household in the same county. The exact increase varies by location, but it typically adds $5,000 to $8,000 per additional person.

Your household size includes everyone living in the home who will be on the mortgage or who depends on the income of someone on the mortgage. It includes children, elderly parents, and other relatives. It does not include roommates who are not related to you and not on the loan.

If you are unsure whether someone counts as part of your household, ask the lender. They use a specific definition and can tell you whether a particular person should be included in your count.

What happens if your income is above the limit

If your household income exceeds the USDA limit for your county, you cannot get a USDA loan. You would need to look at other loan types: a conventional loan, an FHA loan, or a VA loan if you are a veteran.

Conventional loans typically require a larger down payment and a higher credit score than USDA loans, but they do not have income limits. FHA loans also have no income limit and require a smaller down payment than conventional loans, though they charge mortgage insurance.

If you are just slightly over the limit, ask whether the lender can look at your application anyway — some lenders have flexibility in how they calculate income, and a small adjustment might bring you within range. This is worth asking about before you give up on a USDA loan.

Income limits for different property types

USDA loans work for single-family homes, townhouses, and some condos. The income limit is the same regardless of the property type — it depends only on your county and household size, not on what kind of house you are buying.

The property itself must meet USDA standards: it must be in an may be able to access rural area, it cannot be in a city or suburb, and it must be a primary residence (not a second home or investment property). The lender will confirm the property is may be able to access before you move forward.

Frequently Asked Questions

Do I need to be below the income limit or can I be exactly at it?

You can be at or below the limit. If your income equals the limit exactly, you are still within range. Many lenders round to the nearest dollar, so being a few dollars over might still work — ask your lender how they handle the calculation.

What if my income changes after I get the loan?

Income changes after you close do not affect your loan. The USDA only checks your income at the time you apply. If you get a raise, a new job, or a pay cut after closing, it does not change your loan terms or your ability to keep the house.

Can I count my spouse's income if we are not married yet?

No. Only income from people who are legally married or who are on the mortgage counts toward the household total. If you are engaged or in a committed relationship but not married, your partner's income does not count unless they are also borrowing on the loan.

Do I have to report all my income or just W-2 income?

You must report all regular income, including self-employment, rental income, Social Security, and benefits. The lender will ask for tax returns, pay stubs, and bank statements to verify what you reported. Leaving income off your application can disqualify you or lead to loan cancellation later.

What if I have income from a job I just started?

Most lenders want to see at least two years of income history. If you just started a job, they may not count that income yet. If you left a similar job recently, they might count the income from the old job. Ask your lender what documentation they need to consider recent income.