What is the maximum allowable income for a USDA loan as a percentage of AMI?

The maximum allowable income for a USDA loan as a percentage of Area Median Income (AMI) is commonly set at 115%. This guideline is designed to help ensure that USDA loans are directed towards individuals and families who are in need of assistance and typically fall within the low to moderate-income bracket. By establishing this limit, the USDA aims to promote access to homeownership in rural areas for those who might otherwise struggle with affordability.

Setting the threshold at 115% of AMI means that borrowers can qualify for USDA financing as long as their household income does not exceed this percentage, making it accessible for a larger segment of the population who may benefit from this type of loan. This is a critical aspect of the USDA loan program, which is aimed at promoting housing stability and economic development in rural communities.