What income counts toward the USDA limit?

USDA counts the gross income of ALL adult household members, not just the borrowers. This includes income from non-borrowing spouses, adult children living in the home, Social Security and disability payments, rental income, self-employment income, and alimony or child support received. This is stricter than FHA or VA, which only look at borrower income.

What deductions does USDA allow from household income?

USDA allows several deductions from gross income to calculate adjusted annual income: $480 per dependent under age 18, $480 per disabled household member, child care expenses for children under 12 (to enable household members to work), and medical expenses exceeding 3% of gross income for households with an elderly (62+) or disabled member. Maximizing these deductions can help borderline applicants qualify.

Does the USDA loan really have no down payment?

Yes. The USDA Guaranteed Loan program requires zero down payment for eligible borrowers. You can finance 100% of the home purchase price. There is a 1% upfront guarantee fee (can be rolled into the loan) and a 0.35% annual fee on the outstanding balance. Despite these fees, the total cost is often less than FHA or conventional loans with a small down payment.

How do I check if a property is in a USDA-eligible area?

Use the USDA eligibility map at eligibility.sc.egov.usda.gov to check specific addresses. Eligible areas include open country and towns under 35,000 population outside of principal metropolitan statistical areas. Many suburban fringe communities within 30-60 minutes of major cities qualify — the eligible area is much larger than most people expect.

USDA Income Limits Calculator 2026

Q: What are the 2026 USDA income limits?

USDA Guaranteed Loan income limits for 2026 are approximately $112,450 for 1-4 person households in low-cost areas, up to $148,450 for 5-8 person households in those same areas. High-cost areas have limits of approximately $148,450 (1-4 persons) to $195,850 (5-8 persons). Special exception areas like Hawaii can reach $192,000+ for 1-4 persons. Limits are set at 115% of the HUD Area Median Income for each county.

Find out if your household income qualifies for a USDA Guaranteed Loan. Enter your state, area type, household size, and income — and see instantly if you are eligible for a zero-down-payment USDA mortgage.

State

Area Cost Level

Household Size

Annual Household Income

USDA 2026 Income Limit for Your Area

$112,450

4-person household in low-cost area (115% of HUD Area Median Income)

Eligibility

ELIGIBLE

Your Adjusted Income

$95,000

Under Limit By

$17,450

Limit (5-8 persons)

$148,450

Income qualifies for USDA Guaranteed Loan. Verify property location at the USDA eligibility map (eligibility.sc.egov.usda.gov) — the home must be in an eligible rural or suburban area.

Advanced

Advanced Calculator

What counts as income, allowed deductions, limits by area type table

USDA income counting is stricter than FHA or VA — ALL adult household income counts, not just the borrowers. This catches many applicants off guard.

COUNTS as Household Income

All borrowers' gross wages
Non-borrowing spouse or adult income
Other adult household members' income
Social Security / disability payments
Rental income (if earned by household member)
Business income / self-employment
Alimony and child support received

Does NOT Count

Income of minors under 18
Full-time student income (limited exceptions)
Foster care payments
Temporary or one-time income
Inheritance received as lump sum

Key difference from FHA/VA: A non-borrowing adult roommate or adult child living in the home can push household income over the USDA limit even if they are not on the loan application.

Pro

Professional Simulator

115% AMI rule, strategies if over-limit, USDA property eligibility overview

USDA income limits are set at 115% of the HUD Area Median Income (AMI) for each county. As AMI rises annually, limits increase — meaning an income that was over-limit last year may qualify this year.

Your Area Limit

$112,450

115% of local AMI ($97,783 AMI)

Estimated Local AMI

$97,783

Approximate 100% AMI for your area

USDA Threshold

115% of AMI

Set by USDA annually each October

Your Income vs Limit

Under

$17,450 below limit

AMI update timing: HUD updates AMI data annually, and USDA typically adjusts its limits in October each year. If you are close to the limit, it may be worth waiting for the next update — limits have increased in most areas each year since 2020.

How to Use This USDA Income Limits Calculator

This calculator checks whether your household income falls within the USDA Guaranteed Loan income limits — the primary eligibility hurdle for this zero-down-payment program.

Quick Calculator

Select your State (the area type is automatically suggested based on typical costs). Select your Area Cost Level — low-cost rural areas have the lowest limits, while high-cost and special exception areas like Hawaii have higher limits. Choose your Household Size (all people who will live in the home count, including non-borrowers). Enter your Annual Household Income — this must include ALL adult household members, not just borrowers.

Advanced: Deductions

The Advanced tab covers exactly what income counts and what deductions are allowed. Use the Allowed Deductions tab to enter your specific deductions — dependents, child care, medical expenses — which can reduce your adjusted income below the limit even if your gross income is over.

Pro: Strategies and 115% AMI Rule

The Pro section explains the 115% AMI rule that sets USDA limits, strategies for applicants slightly over the limit (retirement contributions, timing), and how to verify property eligibility at the USDA eligibility map.

How USDA Income Limits Are Calculated

USDA Income Limit = Local Area Median Income (AMI) x 115%

Adjusted Annual Income = Gross Income
- ($480 x qualifying dependents)
- Child care expenses for children under 12
- Medical expenses over 3% of gross income (if elderly/disabled member)

Example: $120,000 gross income with 2 dependents under 18
Adjusted Income = $120,000 - (2 x $480) = $119,040
Compared to $112,450 limit... Over by $6,590

USDA income limits use a household income concept that is stricter than FHA or VA. Every adult living in the home contributes income to the household total, even if they are not on the loan. This catches many applicants by surprise when a non-borrowing adult child or roommate pushes the household over the limit.

The 115% of AMI threshold means limits adjust annually with local incomes. In recent years, rising AMI levels have increased USDA limits in most areas, allowing more households to qualify each year.

Example: USDA Income Eligibility Check

Family of 4, Rural Texas, Annual Income $108,000

Gross household income	$108,000
USDA limit (1-4 persons, low-cost area)	$112,450
Deductions (2 dependents under 18)	-$960
Adjusted annual income	$107,040
Eligibility	ELIGIBLE — $5,410 under limit

Family of 4, Same Area, Income $115,000

Gross household income	$115,000
USDA limit	$112,450
Over limit by	$2,550 — normally ineligible
Strategy: Add $6,000 to 401(k) pre-tax	Adjusted gross: $109,000
Result after 401(k) contribution	ELIGIBLE — $3,450 under limit

Maximizing pre-tax retirement contributions is one of the most effective ways to reduce countable USDA income when you are just slightly over the limit.

Frequently Asked Questions

USDA Guaranteed Loan income limits for 2026 vary by county and household size. In low-cost areas, the limit is approximately $112,450 for 1-4 person households and $148,450 for 5-8 person households. High-cost areas have limits of approximately $148,450 (1-4 persons) to $195,850 (5-8 persons). Special exception areas like Hawaii can reach $192,000 or higher for 1-4 person households. Always verify your specific county at USDA.gov, as limits are set county by county.

Yes. USDA counts the income of all adult household members regardless of whether they are on the loan. A non-borrowing spouse who lives in the home must have their income counted toward the household total. This is one of the key differences between USDA and FHA — FHA only considers borrower income for approval purposes, while USDA counts all household income for the income limit test.

USDA eligible areas include open country and towns with populations under 35,000 that are outside principal metropolitan statistical areas. Many suburban communities qualify — the eligible zone is often much larger than people expect. Communities within 30-60 minutes of major cities like Dallas, Atlanta, Denver, and Phoenix frequently qualify. Check the USDA eligibility map at eligibility.sc.egov.usda.gov to see if a specific property address qualifies.

FHA has no income limits — any income level can apply. USDA has income limits set at 115% of the Area Median Income. Additionally, USDA counts all household member income for the limit test (even non-borrowers), while FHA only considers borrower income. USDA requires $0 down and charges a 1% upfront guarantee fee plus 0.35% annual fee. FHA requires 3.5% down and charges 1.75% upfront MIP plus 0.85% annual MIP. USDA is usually cheaper but has more restrictive income and location requirements.

You can legitimately reduce your countable USDA income through pre-tax retirement contributions (traditional 401k, IRA) and by claiming all allowed deductions ($480 per qualifying dependent, child care expenses, and medical expenses over 3% for elderly or disabled household members). Timing your purchase before a raise also helps. However, deliberately reducing actual income (working fewer hours) just to qualify is generally not advisable from a financial planning standpoint.