A USDA home loan is a zero down payment mortgage for qualified rural and suburban homebuyers. USDA loans are distributed through the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program, by the United States Department of Agriculture.

The USDA invested almost $20 billion in 2014 to help nearly 140,000 families buy and improve their homes. It offers low interest rates and no down payments, and you may be amazed to find that you may qualify for one.

There are three USDA home loan programs:1. Loan guarantees: The USDA guarantees a mortgage issued by a participating local lender permitting you to get low mortgage interest rates, even without a down payment. However, if you put little or no money down, you will have to pay a mortgage insurance premium.

2. Direct loans: Distributed by the USDA, these mortgages are for low- and very low-income applicants. Income limits differ by region. With subsidies, interest rates can be as low as 1%.

3. Home improvement loans and grants: These loans or out-and-out financial awards empower homeowners to overhaul or upgrade their homes. Packages can additionally combine a loan and a grant, affording up to $27,500 in assistance.