If I told you there is still a mortgage program in 2026 that can allow a qualified buyer to purchase a home with no down payment, would you believe it?

Many California homebuyers are surprised to learn that the USDA Single Family Housing Guaranteed Loan Program still provides 100% financing for eligible borrowers purchasing homes in eligible areas.

And despite the word “rural” in the program's name, you shouldn't automatically assume that USDA financing is limited to farms or remote areas.

For buyers looking in Riverside County and other parts of Southern California, it is worth checking a property's eligibility before assuming USDA isn't an option.

What Is a USDA Home Loan?

The USDA Single Family Housing Guaranteed Loan Program is backed by the U.S. Department of Agriculture's Rural Development program.

Its purpose is to help eligible low- and moderate-income households purchase adequate primary residences in qualifying rural areas.

One of its biggest advantages is straightforward:

Qualified borrowers may be able to finance 100% of the home's purchase price, meaning no traditional down payment is required.

USDA states that eligible borrowers can use the Guaranteed Loan Program to purchase, build, rehabilitate, improve or relocate a dwelling in an eligible rural area with 100% financing.

Do You Have to Be a First-Time Homebuyer?

No.

This is another common misconception.

The USDA Guaranteed Loan Program is not restricted to first-time homebuyers.

A previous homeowner may potentially qualify as long as the borrower, property and transaction satisfy USDA requirements.

That can make USDA worth considering not only for renters buying their first house, but also for eligible homeowners moving to another property.

Does the House Have to Be on a Farm?

No.

“Rural” is a USDA eligibility designation. It doesn't mean that you have to purchase agricultural property or live miles away from civilization.

USDA maintains a property eligibility system that allows a particular address to be checked.

That distinction is especially important here in Southern California.

Rather than saying, “I'm buying near Murrieta or Temecula, so USDA won't work,” have the actual property checked.

Some properties will not qualify. Others outside denser population centers may.

USDA property eligibility is address-specific, so it should be verified before relying on USDA financing in a purchase offer.

What Is the Income Limit?

USDA is an income-restricted mortgage program.

For the Guaranteed Loan Program, USDA currently states that household income generally cannot exceed 115% of the applicable median household income.

This is different from simply looking at the income of the person whose name appears on the mortgage.

USDA household-income calculations can involve income from adult household members even when a particular person is not a borrower on the mortgage, subject to USDA's rules and applicable exclusions.

That's why I recommend checking household eligibility early.

A buyer can have excellent credit and sufficient qualifying income for the mortgage but still exceed USDA's household-income limit.

Conversely, a family that assumes its income is too high may actually qualify after the applicable USDA calculations and permitted deductions are reviewed.

What About Credit Scores?

Here's another interesting USDA feature.

USDA states that the Guaranteed Loan Program itself does not establish a single minimum credit-score requirement. Applicants are expected to demonstrate the willingness and ability to manage debt.

However, that does not mean credit doesn't matter.

Individual lenders can have their own underwriting standards or overlays, and the borrower's overall credit history remains part of mortgage qualification.

So don't interpret “no USDA minimum credit score” as “credit doesn't matter.”

It does.

USDA Loans Are for Primary Residences

A USDA Guaranteed Loan is designed for an eligible borrower who will personally occupy the property as a primary residence.

It isn't designed as financing for a vacation home or investment property.

If your goal is buying a rental property, other programs—such as conventional investment financing or potentially a DSCR loan—may be more appropriate.

But if you're buying the home you intend to live in, USDA deserves consideration when the property and household meet the program requirements.

What Type of Mortgage Do You Get?

USDA's Guaranteed Loan Program provides 30-year fixed-rate financing.

The interest rate itself is determined by the individual lender rather than USDA setting one universal Guaranteed Loan interest rate.

That distinction is important when you see USDA rates advertised online.

There isn't one single “USDA rate” available to every borrower.

Rates can vary based on lender pricing, market conditions and the individual transaction.

For perspective on the broader mortgage market, Freddie Mac's latest available weekly survey reported that the national average 30-year fixed conventional mortgage was 6.71% as of September 3, 2026, compared with 6.66% the previous week.

That Freddie Mac figure is a national conventional-market benchmark. It is not a USDA quote and is not a rate offered by Premiere Capital Mortgage.

Zero Down Doesn't Mean Zero Cost

This is one of the most important distinctions for buyers.

No down payment does not necessarily mean no money needed at closing.

A purchase can still involve closing costs, prepaid property taxes, homeowners insurance, escrow funding, inspections and other transaction expenses.

Depending on the transaction and applicable guidelines, however, there may be ways to structure allowable seller contributions or other permitted sources to help with certain costs.

That's why the real question shouldn't simply be:

“How much is my down payment?”

It should be:

“What is my total estimated cash to close?”

Those are two different numbers.

USDA vs. FHA: Which Is Better?

There isn't a universal winner.

FHA can be an excellent program and generally isn't restricted to USDA-designated geographic areas or USDA household-income limits.

USDA can be particularly attractive when a borrower and property qualify because of its 100% financing feature.

The correct comparison should include:

• Down payment

• Estimated cash to close

• Monthly principal and interest

• Mortgage insurance or USDA-related fees

• Property eligibility

• Household-income eligibility

• Credit profile

• Total monthly housing expense

• Long-term plans

Sometimes FHA wins.

Sometimes conventional financing wins.

And for the right borrower and property, USDA can be an outstanding option that buyers didn't even know was available.

Before You Rule Out a Home, Let Me Check the Address

If you're searching for a home in Riverside County, the Murrieta/Temecula region, or another part of Southern California, don't automatically rule out USDA financing.

Give me the property address.

We can check whether the location meets USDA eligibility requirements and then review your household income and overall mortgage qualifications.

If USDA doesn't work, we'll look at the other available financing options.

But if it does work, you may discover a path to homeownership that requires no traditional down payment.

John F. Lawrence
Premiere Capital Mortgage
Murrieta, California
951-634-9284
PCMloans.net

This article is provided for educational purposes only and does not constitute a commitment to lend, an interest-rate quote or a guarantee of financing. USDA eligibility is subject to borrower, household-income, property-location, lender and program requirements. Property and income eligibility should be verified for each transaction. Rates, fees and program guidelines are subject to change.