Quick answer
Both USDA and VA loans offer 0% down on a primary residence, but they’re for different people. VA loans are for eligible veterans, service members and some surviving spouses, anywhere in Tennessee, with no monthly mortgage insurance. USDA loans are for anyone under the county income limit buying in an eligible rural area.
VA charges a one-time funding fee, waived for many disabled veterans. USDA charges a 1% upfront fee plus a 0.35% annual fee. If you qualify for both, compare the fees and rates on your own file.
Program figures on this page were verified on , including USDA’s fiscal year 2027 fees. Program terms and eligibility are subject to VA, USDA and lender guidelines and may change.
At a glance: USDA vs. VA
- Who: VA = military service; USDA = income and address
- Where: VA anywhere; USDA only in eligible areas (none in Davidson County)
- Fees: VA 2.15% first use, often waived; USDA 1% plus 0.35% a year
- Income limit: USDA yes; VA no
- Eligible for both: compare total cost; a fee-exempt veteran usually leans VA
What is the difference between a USDA loan and a VA loan?
| VA loan | USDA guaranteed loan | |
|---|---|---|
| Who qualifies | Eligible veterans, service members, Guard and Reserve members, some surviving spouses | Any household under USDA’s county income limit |
| Where | Anywhere | Only addresses in a USDA-eligible area |
| Down payment | 0% with full entitlement | 0% |
| Upfront fee | Funding fee, 2.15% on first use with less than 5% down; waived for veterans receiving VA disability compensation | 1% guarantee fee |
| Ongoing fee | None | 0.35% of the balance per year, for the life of the loan |
| Income limit | None | 115% of area median income, counting every adult in the household |
| Loan size | No VA limit with full entitlement | No set maximum, but income limits and debt ratios cap it in practice |
| Loan terms | Fixed and adjustable; purchase, cash-out, IRRRL, one-time-close construction | 30-year fixed purchase |
| Credit | No VA minimum; lenders commonly look for about 580–620 | No published minimum; 640+ typically gets an automated approval |
| Seller help | Customary closing costs plus up to 4% in concessions | Generally up to 6% in interested-party contributions |
| Occupancy | Primary residence | Primary residence |
Sources: VA eligibility; VA funding fee; 7 CFR Part 3555; USDA fiscal year 2027 fee notice. Program terms and eligibility are subject to VA, USDA and lender guidelines and may change.
How do the fees compare on a $350,000 home?
On an illustrative $350,000 Robertson County purchase with no down payment:
| VA, first use | VA, fee waived | USDA | |
|---|---|---|---|
| Upfront fee, financed | $7,525 (2.15%) | $0 | $3,535 (1% of the $353,535 loan) |
| Loan amount | $357,525 | $350,000 | $353,535 |
| Annual fee | None | None | 0.35% of the balance: about $1,237 in year one, a little less each year |
Illustrative example only. Actual interest rates and APRs vary based on loan program, borrower qualifications, property, market conditions and other factors. For a five-year cost comparison that includes FHA and conventional options, see how the zero-down options compare.
Where can you use a USDA loan in Middle Tennessee?
USDA eligibility is checked by exact street address on USDA’s eligibility map, not by county or ZIP code. Davidson County has no eligible area. Cheatham County is eligible everywhere. Most of Robertson and Sumner counties qualify, but much of Springfield, Gallatin and Hendersonville doesn’t, and nearly all of Clarksville is ineligible while the rest of Montgomery County qualifies. Check the address before you fall in love with a house. Our county guides show the detail town by town.
Which is better if you qualify for both?
- A veteran exempt from the funding fee usually comes out ahead with VA: no upfront fee and no annual fee.
- A first-use veteran who pays the fee should compare. VA’s fee is larger upfront, but USDA’s annual fee continues for the life of the loan, so the longer you keep the loan, the more that annual fee adds up.
- Higher household income may rule out USDA, since every adult in the home counts toward the cap, even one who isn’t on the loan.
- Non-rural or city addresses only work with VA.
- Using VA keeps entitlement tied up until that loan is paid off; using USDA leaves your VA benefit free for a future home.
Which costs less over time depends on the rates each program offers you, the fees, and how long you keep the loan, so we price both side by side.
USDA vs. VA loan FAQ
Do USDA or VA loans require being a first-time buyer?
No. Neither program has a first-time-buyer requirement. USDA requires that you not own another adequate home in the area, and both programs require the home to be your primary residence. Program terms are subject to VA, USDA and lender guidelines and may change.
Does a USDA loan have mortgage insurance?
Not private mortgage insurance, but it has a similar cost: a 1% upfront guarantee fee and a 0.35% annual fee on the balance, paid monthly for the life of the loan. VA loans have no monthly mortgage insurance; they charge a one-time funding fee instead, unless you’re exempt.
Can a surviving spouse use a VA loan?
Some can. Surviving spouses receiving Dependency and Indemnity Compensation, or whose spouse is missing in action or a prisoner of war, may qualify, and DIC recipients are exempt from the funding fee. Anyone can use USDA if they meet its income and address rules.
Can I build or buy new construction with USDA or VA?
Both can buy newly built homes that meet their standards. VA also offers one-time-close construction loans through some lenders. USDA’s single-close construction option is rare in the broker channel. Ask before you sign a builder contract.
Where these figures come from
| Figure | Source | As of |
|---|---|---|
| VA service requirements | VA.gov, Eligibility | Retrieved Oct 26, 2026 |
| VA funding fee and exemptions | VA.gov, Funding fee and closing costs | Rates effective Apr 7, 2023 |
| No VA loan limit with full entitlement | VA.gov, Loan limits | Effective Jan 1, 2020 |
| USDA 1% upfront and 0.35% annual fee | USDA Rural Development, FY2027 fee notice | FY2027, from Oct 1, 2026 |
| USDA income limits, property eligibility, program rules | 7 CFR Part 3555; USDA eligibility site | Retrieved Oct 26, 2026 |
Related guides
- What is a VA loan, and who qualifies?
- Can you buy a home with 0% down in Tennessee?
- Cheatham County mortgage guide, eligible for USDA everywhere.
- Montgomery County and Fort Campbell mortgage guide.
- About Christopher Armantrout, the licensed originator who wrote this page.
Eligible for both? Talk to Valor Mortgage.
Send me your DD-214 and the address you’re looking at, and I’ll check your VA entitlement and funding-fee status, the USDA map and income cap, and price both loans side by side.
Call me at (615) 671-9178. That’s the fastest way to get a straight answer on what you’d qualify for and how USDA and VA compare for you.
If it’s after hours, grab a time on my calendar. Pick a slot that works and I’ll call you then.
If your life is too chaotic for a phone call right now — I understand — start an application and I’ll review it and reach out with a plan.
Valor Mortgage, LLC · Christopher Armantrout, Mortgage Loan Originator, NMLS #1210804 · Valor Mortgage, LLC is powered by Encore Lending Group, LLC, NMLS #1249911 · Licensed in Tennessee · Equal Housing Opportunity
724 S Main St, Springfield, TN 37172 · (615) 671-9178 · christopher@valor.mortgage · NMLS Consumer Access
The dollar figures on this page are illustrative examples for general information only and are not an offer, a rate quote, or a commitment to lend. Actual interest rates and APRs vary based on loan program, borrower qualifications, property, market conditions and other factors. Program fees, limits and terms are set by the agencies named above and change without notice; all loans are subject to credit approval, income verification and property appraisal. Not all applicants will qualify.