A USDA Rural Development loan lets eligible buyers in the rural areas around Colorado Springs purchase a home with zero down payment. If you are looking just outside the city — in places like Calhan, Peyton, Yoder, Ellicott, or Ramah — a USDA loan can be one of the most affordable paths to homeownership. The catch is that the property must sit in a USDA-eligible rural area and your household income must fall under the county limit, so the first step is always to check. Rated 4.9★ on Google. (NMLS #1601989, Equal Housing Lender.)
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What is a USDA loan?
A USDA loan is a mortgage backed by the U.S. Department of Agriculture’s Rural Development program. It was created to help low- and moderate-income households buy homes in rural and some suburban communities. The most popular version is the Single Family Housing Guaranteed Loan, where a private lender like 719 Lending makes the loan and the USDA guarantees a portion of it. That federal backing is what allows 0% down financing for eligible buyers.
USDA loans are for primary residences only — you must move into the home (typically within 60 days of closing) and live there. They cannot be used for second homes, vacation properties, or investment rentals.
Which areas near Colorado Springs are USDA-eligible?
This is the most important thing to understand: most of the Colorado Springs metro is NOT USDA-eligible. The City of Colorado Springs and densely developed suburbs are excluded because USDA targets rural areas. However, the rural fringes of El Paso County and the surrounding region often do qualify.
Communities in and near El Paso County that have included USDA-eligible zones include Calhan, Peyton, Yoder, Ellicott, Ramah, Rush, Truckton, and parts of eastern El Paso County, plus nearby rural pockets in Teller County (such as areas around Woodland Park) and rural Pueblo County. Eligibility is drawn by mapped boundaries, not by city name, so two homes on the same road can have different answers.
Because the maps are precise and updated periodically, you must confirm a specific address against the official USDA property eligibility map before counting on USDA financing. We will run any address you are considering and tell you straight whether it may qualify.
Benefits
- No down payment required for eligible buyers — finance up to 100% of the appraised value.
- Lower upfront cost than many low-down options, which helps cash-tight first-time buyers.
- Competitive fixed rates on a 30-year term, backed by the federal guarantee.
- The guarantee fee can be financed into the loan rather than paid out of pocket at closing.
- Flexible credit guidelines compared with some conventional programs.
- Gift funds allowed toward closing costs, and seller-paid closing costs are permitted within program limits.
Requirements & eligibility
- Eligible property location. The home must be in a USDA-designated rural area — verified on the USDA map.
- Income limits. Household income generally must be at or below 115% of the area median income for your county and household size. Limits are updated periodically by USDA, so we calculate yours against the current figures.
- Primary residence only. No second homes or investment properties.
- Credit. Many lenders look for a score around 640 for streamlined automated underwriting; lower scores may still be considered with manual underwriting. Ask us to check whether you may qualify.
- Citizenship. U.S. citizens, U.S. non-citizen nationals, and qualified aliens (such as lawful permanent residents) may be eligible.
- Stable income and reasonable debt-to-income consistent with USDA guidelines.
The process in Colorado Springs
- Confirm the property is eligible. Send us the address (or the area you are shopping) and we will check it against the USDA map.
- Verify your income fits the limit. We compare your household income to the current USDA limit for that county and household size.
- Get pre-approved. We review credit, income, and assets so you can shop with a real budget and a strong offer.
- Go under contract and order the appraisal. The home must meet USDA property and appraisal standards.
- Close and move in. Sign, fund, and take occupancy as your primary residence.
USDA vs. other loan options
If the home you want is inside the city or the address is not USDA-eligible, you still have strong low- and no-down paths. Compare USDA with a low down payment purchase option, an FHA loan, a VA loan (also $0 down, for eligible veterans), or a conventional fixed-rate mortgage. New to buying? Start with our first-time home buyer guide, or browse all loan options.
Why Colorado Springs chooses 719 Lending
As a local Colorado Springs broker, we know which surrounding communities tend to qualify for USDA and we will tell you honestly when a different program is the better fit. We shop your file across lenders, explain every fee, and keep you moving from pre-approval to closing. See what our clients say on our reviews page.
USDA Loan FAQ
Is Colorado Springs eligible for a USDA loan?
Most of the City of Colorado Springs is not eligible because USDA targets rural areas. However, rural parts of El Paso County and nearby communities — such as Calhan, Peyton, Yoder, Ellicott, and Ramah — often include USDA-eligible zones. Eligibility is by mapped address, so we recommend checking the exact property with us before assuming it qualifies.
How much is the USDA guarantee fee?
For loans guaranteed in the current federal fiscal year, USDA charges an upfront guarantee fee of 1% of the loan amount, which can be financed into the loan, plus an annual fee of 0.35% of the average scheduled balance, paid monthly. These rates are reviewed by USDA each federal fiscal year, and the rates in effect when you close apply.
What are the USDA income limits near Colorado Springs?
USDA generally requires household income at or below 115% of the area median income, and limits are set by county and household size. The exact dollar figure depends on how many people are in your household and is updated periodically by USDA, so the most reliable answer is to have us run your numbers against the current limit for El Paso County.
Can I buy an investment property with a USDA loan?
No. USDA loans are for primary residences only. You must occupy the home as your main residence, typically within 60 days of closing. If you are buying a rental, see our investment property loan options instead.
719 Lending, NMLS #1601989. Equal Housing Lender. This is not a commitment to lend; all loans are subject to credit approval, income and property eligibility, and a satisfactory property appraisal. USDA Rural Development loans require the property to be located in a USDA-eligible rural area and the household income to be within published USDA limits; eligibility must be verified against the official USDA property and income tools. USDA guarantee fees, income limits, and eligible-area maps are set by the U.S. Department of Agriculture and are subject to change. 719 Lending is not affiliated with or acting on behalf of any government agency. Figures and program details are current as of 2026 and subject to change without notice.