How to Fill Out a USDA Loan Application Step-by-Step

The United States Department of Agriculture (USDA) offers various loan programs to help people buy, repair or build homes in rural areas. USDA loans typically have lower interest rates and require little or no down payment compared to conventional mortgages.

If you want to buy or repair a home in an eligible rural area, you may consider applying for a USDA loan. Here’s a step-by-step guide on how to fill out the USDA loan application correctly to improve your chances of approval.

Overview of USDA Loan Programs

The two main USDA loan programs for homebuyers are

• USDA Single Family Housing Direct Home Loans (Section 502 Direct Loans) – Offers low-income applicants 100% financing to buy, build, repair, renovate or relocate a home in eligible rural areas

• USDA Single Family Housing Guaranteed Loan Program (Section 502 Guaranteed Loans) – Provides guarantees to approved lenders to reduce the risk of extending 100% loans to rural homebuyers

USDA also offers loans and grants to very-low income homeowners to repair, improve or modernize their homes through its Section 504 Home Repair program.

To qualify for USDA home loans, you must meet income and credit requirements and purchase a home in a designated rural area. Eligible areas can be found using the USDA eligibility site.

Gather Required Documents

Before filling out a USDA loan application, gather the necessary documents. Having all paperwork ready will make the application process faster.

Here are the key documents needed:

• Tax Returns – Copies of last 2 years signed tax returns. Self-employed applicants will need additional tax docs.

• Pay Stubs – Last 30 days of pay stubs. Applicants paid weekly need 6-8 weeks of pay stubs.

• W2s – Previous 2 years.

• Bank Statements – Last 2 months of statements for all accounts. Statements must show name, account number, balance and deposits/withdrawals.

• Identification – Government-issued ID like driver’s license, passport or permanent resident card.

• Social Security Card – For all household members.

• Existing Mortgage Statement – If you currently have a mortgage.

• Divorce Decree – If applicable.

• Gift Letter – If using gift funds for down payment or closing costs.

Having these documents ready will help you accurately fill out the loan application and speed up processing.

Fill Out the Uniform Residential Loan Application (Form RD 410-4)

The core of the USDA home loan application is Form RD 410-4, also called the Uniform Residential Loan Application (URLA). This standard mortgage application captures your personal information, financial details, the property address, loan purpose and other key data.

Follow these tips when completing Form RD 410-4:

• Use your full legal name – Avoid nicknames.

• Check for accuracy – Double check that details like SSN, birthdate and address are correct.

• Fill out all sections – Leave no blanks unless specifically directed. Enter “N/A” if certain fields don’t apply.

• Answer carefully – Be thorough and honest when providing details about income, debts, credit issues, etc.

• Print clearly – Use blue or black ink. Print neatly and legibly.

• Add required documents – Attach tax returns, bank statements and other required paperwork.

• Sign and date – Application must be signed and dated by all applicants.

Pay close attention when filling out Section 1 (Loan Request), Section 5 (Monthly Income) and Section 6 (Assets). Precise details here are crucial for loan approval.

Gather Details About the Property

In Section 4 of Form RD 410-4, you must provide key information about the property you wish to purchase using the USDA loan such as:

• Full property address

• Number of units

• Year built

• Purchase price

• Loan purpose (purchase, refinance)

• Occupancy type (primary residence, second home)

To fill out this section accurately, get all the right details from the real estate agent or seller.

If you’re buying land to build a new home, provide the property details along with house plans, specs and builder estimates.

List All Household Members

In Section 3, you must provide personal details on each household member that will occupy the property. This includes:

• Full legal name

• Relationship to applicant

• Age

• Number of dependents

Make sure to list every person that will live in the home. Dependents such as children or elderly parents must also be included.

Provide the name, age and relationship of each household member. List the number of dependents claimed on your tax returns.

Accurate household details are necessary to determine your eligibility based on USDA income limits adjusted for household size.

Disclose All Income Sources

One key factor that determines your USDA loan eligibility is household income.

In Section 5, disclose all income sources and amounts for each applicant and adult household member. Income sources may include:

• Employment – wages, salaries, overtime, bonuses, commissions

• Self-employment – income from business, freelancing, etc.

• Social Security, disability, death benefits

• Alimony, child support

• Military pay, veterans benefits

• Pensions, annuities

• Rental income

• Government assistance

• Any other income

Clearly list every income source and the gross monthly amount received before deductions. Provide year-to-date earnings and total estimated income for the next 12 months.

Include supporting documents like recent paystubs, tax returns and W2s. Accurate income details are crucial for loan approval.

List All Assets and Liabilities

USDA will review your assets and liabilities to assess your net worth, liquidity and financial health.

In Section 6, list checking and savings account balances, retirement accounts, stocks, bonds, real estate owned and all other assets.

Then list all liabilities like student loans, credit card balances, auto loans, existing mortgages, child support owed and any other debts.

Provide account numbers, names of creditors, monthly payments and current balances due for each liability.

Submit related documents like bank statements, investment account summaries and existing mortgage statements.

Truthful, complete information will give USDA an accurate picture of your financial situation to determine repayment ability.

Authorize Credit Check and Information Verification

As part of underwriting your loan application, USDA will check your credit report and independently verify the details provided.

Sign Form RD 410-4 at the bottom to authorize credit report access and information verification.

Also sign:

• Form RD 3550-1 – Gives consent to third parties to verify employment history, income, debts, assets and all financial information.

• Form RD 3550-4 – Allows USDA employees to verify employment history, income and financial details.

Signed authorization is required for USDA to process your loan application. Ensure all adult household members sign these forms.

Submit Supporting Documentation

Along with the completed loan application forms, compile and submit all required supporting documents such as:

• Federal tax returns – Last 2 years

• W2s – Previous 2 years

• Pay stubs – Last 30 days

• Bank statements – Last 2 months

• Credit report – From all three bureaus

• Identification – Driver’s license, passport, etc.

• Social Security cards – For all household members

• Existing mortgage statement – If currently mortgaged

• Gift funds documentation – If applicable

• Additional forms like RD 3550-1 and 3550-4

Organize everything neatly with cover sheets and include your name, contact information and property address on each document.

Submit complete supporting paperwork to improve chances of quick loan approval.

Apply In Person, By Mail or Online

The USDA loan application and supporting documents can be submitted:

• In person – At local Rural Development offices listed on the USDA website. Call ahead and set an appointment.

• By mail – Send the application package to your state or local Rural Development office.

• Online – Through USDA’s eForms site. Create an account and fill out forms electronically.

Applying in person allows you to get guidance directly from USDA representatives. Mailing applications takes more time. Applying online is quickest and most convenient.

Choose the application method that works best based on your needs and preferences.

Get Help from USDA-Approved Lenders

The application process can seem complex and intimidating. To make it easier, get help from USDA-approved independent lenders.

These lenders are experts on USDA loan programs. They can guide you in preparing a complete, compliant application package for faster approval.

Many lenders also offer other loan programs and grants that can be combined with USDA financing. Shop around and compare costs and services before choosing a lender.