USDA Maximum Loan Amount

People often get confused about USDA Loans' income and loan amount restrictions. There are maximum household income restrictions enforced based on the number of individuals in a home and the county where it is located. Additionally, there are maximum debt ratio requirements which are calculated by the applicant's total monthly debt divided by the gross monthly income. So what about USDA maximum loan amounts? The fast answer is that there is technically not a maximum USDA loan amount. However, larger USDA loan amounts are not very common. The reason for this is directly related to the max debt-to-income ratio and the maximum allowable household income. This is set in place to help borrowers avoid pitfalls such as payment shock.

Let's start with the max household income. In many areas in the U.S., the maximum USDA household income for a family of 4 or less is $75,650. If you use that income with the average amount of debt with a house payment, a person is only going to be able to afford a certain amount. They will run into a debt ratio problem if they want to purchase a house that is beyond their affordability range. Households with 5 or more individuals are allowed additional income but those, too, will be capped at an amoung based on their maximum allowable income and total debt ratio.  

There is no USDA maximum loan amount but other factors come into play that keep the loan amounts low. USDA home loans were designed for low- to moderate-income families and with maximum household income rules, families can only qualify for certain loan amounts. The debt ratio will prevent a family from buying a larger home that they can't afford.