USDA Income Limits 2026 and What Income Counts: Household vs Repayment Income

The 2026 limits

USDA updated its income limits in July 2026. In most of the country, including much of Central Florida, the guaranteed loan limit is $119,850 for households of one to four people and** $158,250 for households of five to eight**. Some counties are higher. Always confirm your county's exact limit on USDA's eligibility site.

Who counts

The income limit counts every adult who lives in the home, whether or not they're on the loan: a spouse who isn't applying, an adult child with a job, a parent living with you. Income from full time students over 18 is mostly excluded. Children's income generally isn't counted.

Deductions that lower your tested income

Children and dependents: $480 for each child under 18, and for full time students or household members with disabilities.** Child care:** reasonable child care costs for children 12 and under, so a parent can work.** Elderly households:** a $400 deduction when the borrower or co borrower is 62 or older or has a disability.** Medical and disability costs:** for elderly households and household members with disabilities, certain expenses above 3% of income.

Annual income, not just your paycheck

USDA looks at expected income over the next 12 months, including overtime, bonuses, part time work, self employment, Social Security, pensions, child support and other regular income. A raise you've already received counts.

The other side of the limit

Being under the income limit is only half of it. Your income also has to be enough to afford the payment within USDA's debt ratios. That squeeze is why debt to income is the biggest USDA hurdle. See find your USDA window.

Over the limit?

Check every deduction first, especially child care. Confirm whether a household member is a full time student. Compare nearby counties, since limits differ. And if you're still over, compare FHA or conventional options, which have no income limit.

Grandma moves in

Kevin and Laura have two kids, and their income was just under the limit for a household of four. When Laura's mother moved in, her pension counted toward household income and they worried it would push them over.

It did the opposite. Their household grew to five, which moved them into the higher limit for five to eight people. Even with her pension, they stayed under, and they closed with USDA a month later.

What Income Counts for a USDA Loan? Household vs Repayment Income

Test one: household eligibility

This test asks whether your household is under USDA's income limit. It counts the expected income of every adult living in the home over the next 12 months, whether or not they're on the loan, and it counts income even if it isn't stable enough to qualify with.

Test two: repayment income

This test asks whether the borrowers can afford the payment. Only borrowers' income counts, and it has to be stable and likely to continue, usually with a two year history for things like overtime and bonuses.

USDA uses two income tests: household eligibility counts all adults; repayment counts only borrowers with stable income

Test 1

Household limit

Test 2

Can you afford it

Every adult in the home

Borrowers only

On the loan or not

Stable income

All income, even new

Usually 2 year history

overtime or bonuses

for overtime and bonus

Minus deductions

Non taxable income

for kids and child care

may be grossed up

The same paycheck can count differently in each test.

USDA's two income tests.

How common income types are treated

Salary and hourly pay: counts in both tests.** Overtime, bonus and commission:** always counts for household eligibility. For repayment, lenders usually want a two year history.** Part time and second jobs:** count for eligibility, and for repayment with a consistent history.** Seasonal work:** counts with a history of returning each season.** Unemployment:** generally only counts when it's part of a regular seasonal pattern.** Social Security, pensions and retirement income:** count in both tests.** VA disability and other non taxable income:** counts, and may be grossed up for repayment because it isn't taxed.** Child support and alimony received:** count for eligibility, and for repayment with a consistent history and continuance.** Self employment and 1099 income:** usually averaged over two years of tax returns after expenses.

Employment situations

Changed jobs: fine, especially in the same field.** New job offer:** may work with a signed offer and a near start date.** Recent graduate:** school can count toward your history.** On maternity leave:** may work with a confirmed return date and return income.** Probationary period:** usually acceptable if the job isn't temporary.** Teachers on 10 month contracts:** annual salary is used.** Employment gaps:** usually explainable with a letter.

Documents to expect

Recent pay stubs covering about 30 days, two years of W2s, tax returns when needed for self employment or other income, award letters for benefits, and documentation of income for every adult in the household for the eligibility test.

If income changes

If household income rises before closing, eligibility is recalculated, and a big raise could push you over the limit. After closing, income changes don't affect your USDA loan.

Overtime that counted once

Brian works overtime most weeks, but only started a year ago. For the household income limit, all of that overtime counted. For qualifying for the payment, it didn't yet, because there wasn't a two year history.

His base pay still qualified him for the home he wanted, and his total household income stayed under the limit.