USDA just updated their income limits, and it's good news for buyers who thought they made too much money to qualify for a true zero-down loan.
What changed
USDA loans are the true zero-down option, designated for specific areas USDA classifies as rural (some of which don't feel all that rural). It's one of the most popular loans to talk about, but historically one of the hardest to actually qualify for, mostly because of a restrictive upfront (front-end) debt-to-income ratio.
In July 2026, USDA raised their income limits. Here's where Washington stands now:
| Area | 1–4 person household | 5+ person household | |------|---------------------|----------------------| | Longview / Kelso | $128,000 | $170,000 | | Bellingham | $137,000 | $180,000 |
These numbers were meaningfully lower before, which opens up more opportunity for buyers.
Why the front-end DTI matters
USDA really wants to see your front-end debt-to-income ratio around 29–30% to get an approval. On top of that, even though it's zero down, you still need funds for closing costs and at least one month of reserves. Combine that with a tight DTI cap and it made USDA a very hard program to qualify for, despite great rates and lower mortgage insurance.
What it means in real numbers
Take a first-time buyer household of two or three people, both working, under that $137,000 Bellingham limit:
- $137,000 ÷ 12 = ~$11,416/month in income
- At 30% front-end DTI = ~$3,400/mo mortgage payment
- That puts you in the $425K–$475K purchase range, where there are still solid first-time-home options
For a 5+ person household (say, parents or adult kids living with you) at the $180,000 limit, you're looking at a $4,500/mo payment, which becomes very workable when multiple earners are contributing to the home.
The takeaway
This update doesn't fix everything, but it brings USDA income limits in line with the current market and opens the door for more buyers to use a true zero-down program with lower rates and lower mortgage insurance.
Curious if USDA is a fit for you? Grab time on my calendar at applywithrj.com. Want to check income limits or property eligibility yourself? Head to rd.usda.gov.
The Bennett Team, Powered by Canopy Mortgage · (360) 739-3454 · NMLS# 1587912. Equal Housing Opportunity.
