We receive many questions about the USDA maximum loan amount limit for 2023. Generally, all loan programs have loan amount limits – FHA mortgages, VA loans, Conventional Fannie Mae, Freddie Mac. In all states, the loan amount limits depend on the county and can range from the $400’s for FHA loans to over $700,000 for Conforming loans.
USDA 502 Guarantee loans however do NOT have set limits on how much the home buyer can borrow. Instead, home buyers are qualified based on their debt-to-income ratio. Generally speaking, USDA (Rural Development) guidelines require that borrowers’ debt related to housing (mortgage payment, taxes, insurance) not exceed 30% of their gross monthly income.
For example: let’s say you make a gross income of $5,000 per month – 30% of this would be $1,500.00. $1,500 per month would be your max monthly expense allowed for housing per USDA requirements. $1,500 would equal roughly a home purchase price of $220,000 (depending on the exact interest rate, property taxes, home insurance, mortgage insurance, etc) You can find a handy USDA mortgage calculator here on this page.
In addition to this, the USDA RD program has household income limits in place for each county. Please find the latest 2023 income limits here. With these family income limits, and housing debt ratio standards, even borrowers will little to no debt will generally “cap out” at loan amount under $450,000.
Also, keep in mind the housing debt limit mentioned above at 30% is not “set in stone” Some home buyers with strong compensating loan factors like high credit scores, good savings, or great job history may be able to slightly exceed this limit.
USDA Mortgage Source is a leading USDA Rural Development loan resource. Questions? just submit the short Info Request Form found on this page 7 days a week. You can also contact us at Ph: 800-743-7556