If you have wondered how to buy a home in or around Laredo without draining your savings, a USDA home loan might not be the first thing that comes to mind. It sounds like something meant for farmland or wide open ranch land. But many people are surprised. Parts of Webb County just outside the city limits can qualify as USDA eligible, opening real doors for you as a buyer.
Laredo is in a region where affordability remains a top priority for working families. The cost of living is real, and saving tens of thousands for a down payment isn’t something most people can do quickly. That’s the gap the USDA loan was built to fill. It’s not for a narrow slice of buyers. It’s a practical, well-structured loan option for people who work hard, earn a moderate income, and want to stop renting without draining their savings.
USDA offers two main loan options, each designed for different financial situations. You will most often see the USDA Guaranteed Home Loan because it is processed through approved lenders and follows a familiar mortgage process. Then there is the USDA Direct Home Loan, which is funded and serviced by the USDA and is meant for households that need deeper affordability. Both require that you live in the home as your primary residence, and both require that the property be in a USDA-eligible area.
The USDA Guaranteed Home Loan program, also called the Section 502 Guaranteed program, is the most commonly used and understood USDA program. You apply through an approved lender, and USDA guarantees a portion of the loan, allowing the lender to offer more flexible terms.
If you prefer working with a lender, getting pre-approved, shopping confidently, and closing on a typical timeline, this is often the best fit. The Guaranteed program offers these options:
The USDA Direct program, also known as the Single Family Housing Direct Home Loan (Section 502 Direct), operates slightly differently. Instead of going through a regular lender, you work directly with the USDA. This program is aimed at very low- and low-income borrowers who may not qualify for traditional financing.
You will need to fall within very low to low income limits for the area and show housing need. USDA reviews your ability and willingness to repay. If your traditional credit file is thin, alternative credit, such as verified rent and utility payments, may be used to demonstrate a consistent pattern. The property must be safe, sanitary, and modest for the market, and you must occupy it as your primary residence.
If your income is low and you have felt shut out by banks, the Direct program can be a lifeline, especially in areas around Laredo where home prices remain modest compared to larger Texas cities.
Q: Can I use a USDA loan to buy inside Laredo city limits?
A: No, USDA loans are reserved for designated rural areas, so many addresses inside the core city limits will not qualify; however, neighborhoods on the outskirts of Laredo or nearby communities in Webb County often do.
Q: What credit score do you need for a USDA loan?
A: There is no single number that applies to every situation. The Guaranteed program looks for stable income and a clean recent history. The Direct program can consider alternative credit, such as rent and utilities, if traditional credit is limited.
Q: Is USDA only for first-time homebuyers?
A: No, USDA loans are not limited to first-time buyers, as long as you meet the income, property, and occupancy requirements, and you are not buying a second home or investment property.
Q: Do you really get zero down with USDA loans?
A: Many buyers close with no down payment. You may still need funds for closing costs, although seller concessions and certain appraisal situations can reduce what you bring to closing.
Ready to take the next step toward homeownership with a Texas USDA Loan? Get prequalified in just a few minutes and find out how much you can invest in your future.
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If you’ve been putting off buying a home because the down payment feels out of reach, the USDA loan might be what changes the equation for you. It’s a program built for real people with real budgets, and Laredo is a community where it can make a meaningful difference.
Call us at (877) 280-4833 today to speak with our Laredo USDA home loan specialist who can walk you through your options, check your eligibility, and help you figure out if a USDA loan is the right fit for where you are right now.
