100% Financing, No Money Down
Looking to buy a home with no down payment? A USDA loan could be the answer. This zero-down program helps eligible buyers1 looking to buy outside of Cedar Rapids, Marion, Hiawatha, and Iowa City get into a home with fixed rates and no PMI.
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What Is a USDA Loan?
A USDA loan, part of the USDA Rural Development guaranteed housing program, is a government-backed mortgage for low to moderate income buyers in eligible rural and suburban areas of Iowa. It offers 100% financing, a fixed 30-year term, and monthly payments with no private mortgage insurance.1
Key USDA Loan Benefits:
No PMI
USDA loans don’t require private mortgage insurance, which helps reduce monthly costs.
100% Financing
No down payment required, USDA loans finance the full purchase price.
Up to 102% LTV
The USDA guarantee fee can be rolled into the loan for up to 102% total financing.
30-Year Fixed-Rate
Lock in a fixed interest rate for the full term, no surprises or rate hikes later.
Flexible Guidelines
USDA loans allow flexibility with credit history and income documentation.
Local Fit
USDA loans are not limited to farms. Many neighborhoods in Eastern Iowa qualify.
USDA Loan Requirements in Iowa
USDA loans follow a few rules that set them apart from other mortgages. Most come down to where you buy, what your household earns, and your plan to live in the home. An FSB lender can confirm whether you qualify.1
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Eligible Area
The home must sit in a USDA eligible area. Many towns around Cedar Rapids and across Eastern Iowa qualify.
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Income Limits
USDA sets income limits by county and household size. Low to moderate income households can qualify.
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Credit Guidelines
USDA loans use flexible credit guidelines. Talk with a lender about where your credit stands today.
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Primary Residence
You must plan to live in the home full time. USDA loans do not cover rentals or investment properties.
Eligible USDA Areas Around Cedar Rapids
You don’t have to live way out in the country to qualify1 for a USDA loan. Many suburbs near Cedar Rapids and throughout Linn County fall within eligible zones.
- Springville
- Mount Vernon
- Ely
- Palo
- Swisher
- Shellsburg
- Atkins
- Alburnett
- Center Point
- Bertram
- Toddville
- Tiffin
Curious if your town qualifies? Check the USDA eligibility map to see more locations across Eastern Iowa ->
USDA Property Requirements
USDA loans aren’t just about the location. The home itself also needs to meet certain safety and livability standards. You must plan to live in the home full-time; it can’t be a rental or an investment property.
After submitting your application,1 an appraiser will inspect the property to ensure everything checks out.
- Must be a single-family, primary residence
- Functional heating & cooling systems
- Safe, all-weather road access
- Structurally sound with a long-lasting foundation
- Adequate roofing
- Proper electrical system with no exposed wires
- Working plumbing and water pressure
USDA Loan Lenders at a Local Iowa Bank
Work with a local team that knows USDA loans and the Iowa market. Our NMLS-licensed loan officers live and work in Eastern Iowa, with offices in Cedar Rapids.
Frequently Asked Questions: USDA Loans
Find answers to the most common questions from homebuyers in Iowa.
Are only first-time homebuyers eligible for USDA Loans?
No. First-time and repeat buyers can use a USDA loan. As long as you meet the income limits and the property is in an eligible location, you're good to go.
What is the maximum amount that I can borrow for a USDA Loan?
USDA loans don’t have a set loan limit like FHA or VA. Instead, your maximum loan amount is based on your income, debts, and the local market. If you qualify for it, and the home appraises, you can borrow it.
How much are the closing costs for a USDA mortgage?
Closing costs usually run 2%–5% of the home’s purchase price. That includes lender fees, title, appraisal, and prepaid taxes or insurance. You can ask the seller to cover them, or in some cases, roll them into your loan.
What refinance options does the USDA loan offer?
USDA loans offer a streamlined refinance option, but only for current USDA borrowers. That means no appraisal, minimal paperwork, and no out-of-pocket costs if rolled in. Great if you’re just looking for a lower rate.
Do USDA home loans have PMI?
USDA loans don’t require private mortgage insurance (PMI). Instead, there’s a one-time upfront fee, called the USDA guarantee fee, that’s 1% of the loan amount.
There’s also a small annual fee of 0.35%, which is built into your monthly payments. You can roll the upfront fee into the loan to keep it a true $0 down option.
Do USDA home loans require a down payment?
Nope. That’s one of the biggest perks. USDA loans offer 100% financing, so you can buy a home with no down payment required as long as you meet the eligibility criteria.
See If a USDA Home Loan Could Fit Your Plans
USDA home loans can help eligible buyers purchase a home with low upfront costs in qualifying rural and suburban areas. Contact FSB's Mortgage department at 319-730-6990 or fill out the form below to talk with a local lender.
USDA eligibility depends on factors like household income, property location, credit qualifications, and whether the home will be used as your primary residence.
Mortgage Calculators for USDA Homebuyers
Estimate payments, compare options, and plan your next step before you apply.
Ready to Take the Next Step? Apply Online!
No appointment needed. Get started online1 today and we’ll follow up with next steps.
USDA Loan Disclosures
1Must be 18 or older to apply. All loans are subject to credit approval. Funds must be used to purchase, or for the refinance of an existing USDA single family primary residence in a USDA eligible zone. Borrower will be charged a 1% guarantee fee at closing. An annual fee of 0.35% will be charged annually, with options to finance this fee. Income limitations apply. Contact an FSB mortgage lender for more details on whether you qualify.
