Best USDA Lenders

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best usda lendersOf all the major mortgage types available – conventional, Jumbo, FHA, and VA – USDA loans are probably the least understood by the general home-buying public. But they’re actually one of the most valuable mortgage programs available.

USDA loans enable you to purchase or refinance a home using 100% financing, and unlike VA loans, you don’t need to be a veteran to qualify for a USDA loan.

In this article, I’m going to list what I believe to be the best USDA lenders nationwide. Rather than writing them in order, I’m instead listing them by their best strength. After all, there is no one best lender for all consumers. It’s best to focus on which lender will work best for you, and that will depend entirely on your own needs and preferences.

There are hundreds of USDA approved lenders around the country, but which is the best for you?

Top 7 USDA Lenders for 2021

Here are the 7 best lenders for USDA loans in 2021:

1. Rocket Mortgage

Best Online USDA Lender

You might expect that a mortgage lender with an all online application process isn’t well suited for a less typical mortgage program, like USDA loans, but Rocket Mortgage is an exception. Rocket Mortgage is the online lending platform for Quicken Loans, which is the largest mortgage loan originator in the US. That speaks volumes about the service they provide.

The mortgage application process with Rocket Mortgage takes place entirely online. That will be an advantage if your loan fits neatly within USDA mortgage guidelines. But it could be a bit of a problem if it doesn’t. USDA loans are more complicated than other types, if only because they’re less common. But Rocket Mortgage has a well-trained staff to handle all types of loans, including USDA mortgages.

Rocket Mortgage also offers all other types of mortgages, so if the USDA route doesn’t work, you’ll have plenty of options. And just as important, Rocket Mortgage lends in all 50 states.

Its parent company, Quicken Loans – which funds all Rocket Mortgage loans – has a strong customer satisfaction rating. It has the highest rank among non-military lenders on the J.D. Power 2019 U.S. Primary Mortgage Origination Satisfaction Survey, with a score of 880 points out of 1,000.

Pros

  • All-online application process
  • Pre-approval in less than 10 minutes
  • Accounts can be accessed online, resulting in minimal paper documentation
  • Dedicated customer support, as-needed

Cons

  • No local branches
  • Alternative credit sources are not considered

2. Wells Fargo

Best Big Bank Lender

Wells Fargo is not only one of the biggest banks in the country, but they’re also one of the leading mortgage lenders. In fact, they rank second only behind Quicken Loans as the biggest mortgage originator in the country. And they’re a major provider of USDA mortgages, along with virtually every other type of mortgage program.

But what sets Wells Fargo apart from other lenders, particularly in the USDA space, is their vast branch network. They have thousands of branches across the country. That can be particularly significant when it comes to USDA loans because they are more complicated than other common mortgage types. This is particularly true in regard to both borrower qualification and property specifications.

The availability of local branches means you can enjoy the benefit of face-to-face contact throughout the loan process. And as a bank, Wells Fargo also provides full-service banking. That can be an important addition to any new homeowner’s financial repertoire. You can open checking, savings, and other accounts, and even make mortgage payments at a local bank branch.

Pros

  • Offers all mortgage programs, including USDA
  • Most brick-and-mortar branches of any mortgage lender (over 5,000 locations)
  • Offers a complete line of banking services
  • Customer service available 7 days/week

Cons:

  • Not available in all 50 states

3. AmeriSave Mortgage

Best for Lowest Fees

AmeriSave Mortgage has been in business since 2002 and has become one of the leading mortgage lenders in the country across all mortgage program types. They provide USDA mortgages, in addition to all other types of mortgage financing. The company operates in 49 states and the District of Columbia (New York is the exception).

AmeriSave enables you to get prequalified online in as little as three minutes. And just as important, they do a soft credit pull that won’t affect your credit score while you’re shopping for a mortgage. In fact, they don’t even request your Social Security number upfront.

AmeriSave has some of the lowest mortgage rates in the industry. They also have a unique guarantee. Either they will save you at least $1,000, or pay you $100. The loan savings will be in the form of closing costs, loan payments, or a combination of the two. The company also reportedly does not charge an origination fee.

Pros:

  • Offers all mortgage programs, including USDA loans
  • Guarantee to save you money compared to the competition, or they’ll pay you $100
  • Operates in 49 states + the District of Columbia

Cons

  • Not available to residents of New York
  • Only six branches nationwide
  • Customer service is only available on weekdays

4. USAA

Best for Military Families

Though USAA is best known for VA mortgages, they provide other types of mortgage financing, including conventional mortgages and USDA loans.

USAA works strictly with current and former members of the military. You must be either active-duty military or an honorably discharged veteran, or a family member of either, to be eligible to use the services of the company. And while they primarily offer VA mortgages, they recognize veterans may be better served with other types of loans, including USDA loans.

This is important because while both VA and USDA loans provide 100% financing, USDA loans offer lower interest rates if a veteran can qualify under program guidelines. They can be especially valuable if a rural property needs significant renovations.

Still another advantage with USAA is that they are not strictly a mortgage lender. They also provide all types of insurance, banking services, investments, retirement plans, credit cards, personal loans, and even health insurance and wealth management.

In the J.D. Power 2019 U.S. Primary Mortgage Origination Satisfaction Survey (released November 2019), USAA outscored every other mortgage lender in the survey, with 900 out of 1,000 points.

Pros

  • Designed specifically for military, veterans, and their families.
  • Specializes in VA loans, but also handles USDA and conventional mortgages
  • Other financial services available
  • Operates in all 50 states
  • Customer service available 7 days/week

Cons

  • Not available to those who are not connected to the US military
  • No branches in most states

5. Guaranteed Rate

Best for Good Credit

Guaranteed Rate offers quick processing and high approval rates for borrowers with good credit. The company reports 96% of their customers would recommend them to friends and family. This is supported by the company’s Better Business Bureau rating of “A+,” which is the highest rating on a scale of A+ to F. What’s more, Guaranteed Rate has been BBB accredited since 2009.

And not only does the company operate across the country, but they also have a branch offices in all 50 states. Once again, this can be a major advantage with USDA mortgages, since they can be more involved than other types of loans. That’s in addition to what is generally an all online application process. Guaranteed Rate gives you the choice of either online or face-to-face in handling your USDA application process.

Like other lenders on this list, Guaranteed Rate provides the full range of mortgage loan products, including conventional, Jumbo, FHA, and VA mortgages, in addition to USDA loans. But they also offer personal loans of up to $40,000 with no fees of any sort. Personal loans can be used for any purpose and are available through Marcus by Goldman Sachs. That may not help you with your USDA loan, but it’s always good to work with a lender that also provides other financial services.

Pros

  • All-online application process or face-to-face – it’s your choice
  • Fast loan approval for good or excellent credit
  • Branches in all 50 states
  • Also offers personal loans

Cons

  • Fees are higher than average

6. New American Funding

Best Lender for Impaired Credit

New American Funding is a nationwide mortgage lender with a reputation for working with mortgage borrowers with impaired credit.

That doesn’t mean you can be approved for a USDA loan with poor credit. USDA does require a minimum credit score of 640 – which is hardly poor credit – at least if you want to get a fairly quick approval. If your credit score is lower, you’ll need to go through a manual underwriting process. That may require submitting additional documentation and a longer time in underwriting. It also won’t guarantee loan approval.

But if you do have impaired credit, and you want a USDA mortgage, New American Funding is the go to-lender. One of the big advantages they offer is that they take a hands-on approach to mortgage processing, and mostly underwrite loans manually anyway. In addition, they offer all other types of mortgage loans, just in case you ultimately decide to go a different route.

Like many of the other mortgage lenders on this list, New American Funding has an “A+” rating with the Better Business Bureau.

Pros

  • One of the strongest USDA lenders in the country
  • Offers a hands-on approach for complicated loan types, like USDA loans
  • Manual underwriting process for lower credit scores
  • Works with the Spanish-speaking community

Cons

  • Not available in New York or Hawaii

7. LendingTree

Best Marketplace for USDA Loans

LendingTree is not a direct lender, but they can point you to the largest number of USDA approved lenders in your area. That can be important, because some of the best USDA lenders are small, local companies.

LendingTree is an online lending marketplace, including for mortgages. It will give you an opportunity to find the largest number of USDA participating lenders in your area. From there, you’ll be able to select the lender offering the best combination of rate and convenience.

Be careful, however, because lenders offering the lowest rates and fees are not necessarily the best for USDA loans. If you require special handling, you’ll need to work with the ones that have the most extensive expertise. You’ll likely find some of the lenders included on this list when you search LendingTree. If not, be sure to check them out with the local Better Business Bureau to make sure they have a good reputation.

One of the big advantages of working with LendingTree is that the site can also help you to find other types of financing. That includes auto loans, personal loans, student loans, and credit cards. It’s an excellent lending marketplace for any consumer to become familiar with.

Pros

  • Access to multiple lenders
  • All types of mortgage loans available, including USDA loans
  • Other personal and business loans also available
  • No cost to use

Cons

  • May include lenders with less than top reputations
  • Not a direct lender

What to Look For In A USDA Mortgage Lender

The criteria I used in coming up with this list of the best USDA lenders are similar to what you should use in your own search – should you decide to use other lenders. If so, keep the following in mind in your search:

USDA Loans are Not Like Other Mortgage Programs

Be careful that you don’t search for companies that are considered top-of-the-line in other mortgage types. Even if a company is the best in your area for conventional financing, they may have very little experience with USDA loans.

Part of the problem is that many mortgage lenders are set up to do mortgages primarily in metropolitan areas. Those are very different markets from rural areas more commonly served by USDA loans. Even though USDA loans are available in most counties in the US, including most of those in large metropolitan areas, the emphasis is almost always on conventional, Jumbo, FHA, and VA mortgages.

USDA loans have a combination of very specific borrower requirements and property requirements.

Find a Lender That Specializes in USDA Mortgages

Just because a bank or mortgage lender provides mortgages doesn’t mean they offer USDA loans. And many more do, but don’t emphasize them. In fact, many do so few USDA loans that rates for the program aren’t even included on their rate sheets.

The lenders I’ve included on our list provide all types of common mortgage financing, as well as USDA loans, and generally on either a national or near-national basis. That won’t be true of all lenders.

One of the worst outcomes is working with a mortgage company that does very few USDA loans, turning you into something of a test case, either for the local branch for or the loan officer you’re working with.

Any mortgage lender you choose to work with should come with recommendations, either from others who have done USDA loans with that company, or from various websites indicating as much.

Tell Them You Want a USDA Loan Upfront

Since very few mortgage representatives have any serious experience with USDA loans, they may never suggest that you take one. You’ll need to request it upfront specifically.

If the representative attempts to steer you away from a USDA loan, it may be that he or she has no experience with the program. If so, either ask to be directed to someone in the organization who specializes in USDA loans or plan to take your business elsewhere.

This is why it’s so important to make it clear at the very beginning that you specifically want a USDA loan.

The Lender Should Offer Other Mortgage Programs

Because the specifications for USDA loans are so detailed, there’s a good chance either you or the property you’re purchasing or refinancing won’t meet program guidelines.

That’s why every lender on this list provides other types of mortgage financing. If you don’t qualify for a USDA loan, you’ll need alternatives.

Who Is the Best USDA Lender for You?

It’s precisely because USDA loans have very specific requirements, and aren’t commonly offered by most lenders, that you need to be patient in both the search for a lender and with the application process itself. That’s why it’s so important to rely on a list of the best USDA lenders, like this one. It will at least eliminate the search part of the equation.

But once you make an application, do so with a large dose of patience and a willingness to cooperate at every turn. The loans are more document-intensive, as well as the fact that there are more requirements. As such, the approval process may very well take longer than the usual 30 days for other types of loans.

But work with an experienced lender, be ready to provide all documentation required, and be prepared for the time it will take. With all the advantages USDA loans offer, it’ll be well worth the wait.

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