USDA Rural Development Loans in Michigan
One hundred percent financing with no down payment for homes in eligible rural areas. In Northern Michigan, a large share of the properties we finance qualify. If you are buying outside a major city and your household income fits the limits, USDA is worth checking before anything else.
Updated October 27, 2026
Union Home Mortgage is one of six lenders nationwide selected for USDA's Delegated Authority LITE pilot program, starting December 1, 2026. The pilot is designed to remove a separate USDA review step before closing. Here is what that means for you.
One less handoff before closing day
Starts 12/1/2026Union Home Mortgage is one of six lenders in USDA's Delegated Authority LITE pilot. Applies to eligible loans. Timelines depend on the file, appraisal, and title work and are not guaranteed. Subject to credit approval. Union Home Mortgage Corp. NMLS #2229. Equal Housing Lender.
A USDA Rural Development loan offers 100% financing, no down payment, for homes in eligible rural and small-town areas, and most of Northern Michigan outside Traverse City proper qualifies. Buyers must meet household income limits. Starting December 1, 2026, Union Home Mortgage joins USDA's Delegated Authority pilot, which lets approved lenders give final approval on eligible loans without a separate USDA review before closing.
Confirm these numbers before you rely on them. USDA updates income limits and guarantee fees, and the eligibility map changes periodically. We are not going to pretend a web page stays current on its own. Send us the address and your household size and we will confirm today's actual limits and fees for your county before you make a decision.
What Changes on December 1, 2026: The USDA Delegated Authority Pilot
On October 22, 2026, USDA Rural Development announced it is expanding the Delegated Authority Lender Interactive Test Environment pilot for its Single Family Housing Guaranteed Loan Program. USDA shortens that to LITE, which is a mercy. Six lenders were added: Bangor Savings Bank, Fairway Independent Mortgage, New American Funding, PennyMac, Pulte Mortgage, and Union Home Mortgage. That last one is us. Participation begins December 1, 2026.
What delegated authority means, in plain English
Right now, a USDA guaranteed loan gets approved twice. We underwrite it, then the file goes to USDA Rural Development for its own review before USDA issues a conditional commitment (USDA's sign-off that it will guarantee the loan) and we can close. That second review is the step that has historically added time, especially when USDA offices are buried in volume.
Under the pilot, USDA hands that pre-closing approval to the approved lender. The lender takes full responsibility for approving and closing the loan within USDA's regulatory guidelines, with minimal agency involvement before closing. USDA still backs the loan with its 90% guarantee.
The standard USDA process
- Lender underwrites the file to USDA guidelines
- File goes to USDA Rural Development for review
- USDA issues the conditional commitment
- Clear to close, then closing
Under the pilot, starting 12/1/26
- Lender underwrites the file to USDA guidelines
- Lender gives final approval, with no separate USDA pre-closing review
- Clear to close, then closing
- USDA guarantee still backs the loan
What the pilot does not change
- Property eligibility. The home still has to sit in a USDA-eligible area.
- Income limits. Total household income still has to fit USDA limits for your county and household size.
- Underwriting standards. USDA says strong underwriting standards stay in place. The difference is who signs off before closing, not who qualifies.
- Zero down. 100% financing for eligible buyers works the same way it always has.
- Credit approval. Every loan is still subject to credit approval and full underwriting.
What it means for buyers and agents
Fewer handoffs, and typically less waiting on a third party. For a buyer writing an offer in Gaylord or Cadillac against a conventional buyer, that can matter. For a listing agent who has learned to wince when USDA shows up on an offer, it may make that conversation shorter.
What we will not do is promise a closing date based on a pilot that has not started yet. Timelines still depend on the appraisal, title work, documentation, and the file itself. Talk to us before you shorten a contract timeline around it.
What we don't know yet
As of October 27, 2026, the announcement is what has been published. USDA and Union Home Mortgage have not released every operating detail, including exactly which files qualify on day one. We will update this page as guidance comes out. If you are under contract or about to be, call or text and we will tell you where your file stands. USDA's program information lives at rd.usda.gov.
What Is a USDA Loan?
A USDA Rural Development loan is a government-backed mortgage program run by the U.S. Department of Agriculture. Despite the name, it has nothing to do with farming. It exists to support homeownership in rural and smaller suburban communities by offering 100% financing to low- and moderate-income buyers who might otherwise struggle to save a down payment. With a USDA guarantee, eligible buyers can purchase an existing home or build new.
In Northern Michigan, this is a program we use constantly. Cadillac, Gaylord, Grayling, Houghton Lake, Manton, Lake City, Roscommon, and Kalkaska sit almost entirely within USDA-eligible territory. If you are buying in any of these areas and your household income is within the limits, USDA should be the first program we look at.
The program offers competitive interest rates, an upfront guarantee fee that can typically be financed into the loan, and an annual fee that usually runs lower than FHA mortgage insurance. For buyers who qualify, it is often one of the most affordable monthly payment options available.
The two requirements that matter most
1. Property location. The home must be in a USDA-eligible rural area as defined by the USDA eligibility map. That is not just farms and fields. Smaller towns, rural subdivisions, and some suburban areas qualify. In Northern Michigan, most communities outside Traverse City and Petoskey proper are eligible. The map updates periodically as population data changes, so checking the specific address is always the right move.
2. Household income. USDA counts total household income, not just the people on the loan. Adults living in the home who have income are typically counted. Limits vary by county and household size. For most Northern Michigan counties, the limit has been approximately $112,450 for a household of 1 to 4 and $148,450 for 5 to 8. These figures update, so we confirm current limits for your county when we talk.
Who USDA works best for
- Buyers purchasing in Cadillac, Gaylord, Grayling, Manton, Lake City, Houghton Lake, Roscommon, Kalkaska, and surrounding areas
- First-time buyers with steady income and limited down payment savings
- Buyers within USDA income limits who want the lowest possible monthly payment
- Buyers without VA eligibility who want a zero-down option
- Move-up buyers purchasing in a rural area who want to keep cash in the bank
USDA Eligibility: What Qualifies
The property must be
- In a USDA-designated eligible rural area
- A single-family primary residence
- Modest in size and value for the area
- In decent repair, with no major structural or safety issues
- On a publicly maintained road or with legal access
- Not income-producing farmland, a second home, or an investment property
The borrower must
- Have household income within USDA limits for the county
- Show ability to repay: stable income and manageable debts
- Typically have a 640+ credit score for automated underwriting (lower may be possible with manual underwriting)
- Be a U.S. citizen, non-citizen national, or qualified alien
- Occupy the home as a primary residence
- Not currently own adequate housing
USDA vs. FHA vs. VA: Zero Down Comparison
All three can help Michigan buyers purchase with little or nothing down. Here is how they compare.
| Factor | USDA | VA | FHA |
|---|---|---|---|
| Down payment | Zero | Zero | 3.5% |
| Monthly insurance | 0.35% annual fee | None | 0.55%+ |
| Upfront fee | 1% | 1.25% to 3.3% | 1.75% |
| Who qualifies | Income limits apply | Eligible veterans and service members | Most buyers |
| Property restriction | Eligible rural areas | Most properties | Most properties |
| Credit score | 640 typical | 580 to 620 typical | 580 |
| Second homes | No | No | No |
How the USDA Loan Process Works
Check property and income eligibility
We check the address against the USDA eligibility map and confirm your household income fits the limits for your county. This usually takes minutes and tells us right away whether USDA is on the table.
Pre-approval
We review credit, income, and assets and issue a USDA pre-approval. USDA counts all household income, not just borrowers on the loan, so we walk through that carefully up front.
Find your home and go under contract
Your real estate agent writes offers. Once you have an accepted offer, we move into full underwriting.
Underwriting and final approval
We underwrite the file to USDA guidelines. Under the standard process, the file then goes to USDA Rural Development for its own review and conditional commitment, which typically adds time, often a week or two depending on USDA volume. Starting December 1, 2026, Union Home Mortgage participates in USDA's Delegated Authority pilot, which is designed to remove that separate pre-closing review on eligible loans. Either way, we build a realistic timeline into your contract from the start.
Close with zero down
Once we have clear to close, you sign at the closing table. The upfront guarantee fee can typically be financed into the loan, so eligible buyers close without a down payment check. You will still have closing costs and prepaids (taxes and insurance paid in advance) to plan for, and seller concessions may cover some of that depending on your contract and program rules.
Frequently Asked Questions
What is the USDA Delegated Authority LITE pilot program?
It is a USDA Rural Development pilot that lets approved lenders take full responsibility for approving and closing USDA guaranteed home loans within USDA's regulatory guidelines. Instead of sending each file to USDA for a separate review before closing, the lender gives final approval with minimal agency involvement. USDA says the goal is to close loans more efficiently while keeping strong underwriting standards.
Is Union Home Mortgage a USDA delegated authority pilot lender?
Yes. On October 22, 2026, USDA Rural Development named Union Home Mortgage one of six lenders added to the pilot, with participation beginning December 1, 2026. Kirby and Angie originate USDA loans through Union Home Mortgage across Michigan, with a focus on Northern Michigan.
Does the pilot change USDA eligibility or income limits?
No. The property still has to be in a USDA-eligible area, household income still has to fit the county limits, and every loan is still subject to credit approval and underwriting. The pilot changes who gives final approval before closing, not who qualifies.
How long does a USDA loan take to close?
It depends on the file, the appraisal, title work, and how quickly documents come in. Under the standard process, USDA's own pre-closing review typically adds time after lender underwriting, often a week or two depending on USDA volume. Starting December 1, 2026, Union Home Mortgage's participation in the Delegated Authority pilot is designed to remove that separate review on eligible loans. We set a realistic timeline from day one and do not guarantee closing dates.
What areas of Northern Michigan qualify for USDA loans?
Most communities outside Traverse City proper qualify, including Cadillac, Gaylord, Grayling, Manton, Lake City, Houghton Lake, Roscommon, Kalkaska, Mancelona, Bellaire, Elk Rapids, Boyne City, East Jordan, and most surrounding rural areas. Eligibility is based on the specific property address, so send us the address and we will check it.
What are the USDA income limits in Northern Michigan?
Limits vary by county and household size and are updated periodically. For most Northern Michigan counties, the limit has been approximately $112,450 for a household of 1 to 4 people and $148,450 for 5 to 8 people. USDA counts total household income, including adults living in the home who are not on the loan. We confirm current limits for your county when we run your pre-qualification.
Does USDA have mortgage insurance?
USDA uses guarantee fees instead of traditional mortgage insurance: a 1% upfront guarantee fee that can typically be financed into the loan, and an annual fee of 0.35% of the remaining balance, paid monthly. On a $200,000 loan, that annual fee works out to roughly $58 a month, compared with roughly $92 or more for FHA on the same amount. Estimate only, for illustration. Actual amounts depend on loan amount, program, and current fee rates.
Can I use a USDA loan if I already own a home?
Generally USDA requires that you do not own adequate housing when you close. If your current home is being sold, is inadequate for your household, or is too far from the new property, you may still qualify. Every situation is different, so call or text and we will tell you where you stand before you start touring homes.
Can I use USDA to buy a manufactured home in Michigan?
Yes, when the home is on land you own. A USDA Final Rule effective May 5, 2025 made existing manufactured homes eligible, not just new units. The home typically must be within 20 years of its manufacture date, never previously installed on a different homesite, on a permanent foundation and titled as real property, and must meet the thermal zone standard for its location. Michigan is Thermal Zone 3, the most stringent. See our USDA manufactured home requirements.
Buying in Northern Michigan? USDA Might Be Your Best Move.
Zero down, low monthly fees, competitive rates, and a lender in USDA's new pilot program. If you are buying outside Traverse City and your income fits the limits, it is worth five minutes to check. We will tell you straight whether it works for your situation.
Call or text Angie: 616-581-6123
Kirby and Angie Mortgage Loan Team | Union Home Mortgage Corp. NMLS #2229 | Angie Anderson NMLS #1999286 | Kirby Slocum NMLS #680817 | NMLS Consumer Access | Licensed in Michigan, Ohio, and Indiana | Equal Housing Lender. USDA Rural Development loan products are subject to USDA eligibility requirements, income limits, and property location requirements. Income limits, eligible areas, and guarantee fee rates are subject to change per USDA guidelines. Union Home Mortgage's participation in the USDA Delegated Authority LITE Pilot Program begins December 1, 2026. Pilot procedures, eligible loans, and timelines are set by USDA Rural Development and Union Home Mortgage and are subject to change. Pilot participation does not guarantee loan approval or a specific closing date. All loans subject to credit approval and underwriting review. Payment examples are estimates only. Information provided is for educational purposes and does not constitute a loan commitment or guarantee of financing.
