There's truth in the reputation, with nuance. USDA offers zero down, a comparable rate, and cheaper mortgage insurance than FHA, yet FHA underwriting is more forgiving in practice. A borrower who fits both programs might well prefer USDA for the payment. A borrower trying to maximize how much they qualify for usually gets more room from FHA. What makes USDA narrower: - Household income limits. Every adult in the household counts toward the cap, whether or not they're on the loan. - Geography. The home has to sit in a USDA-eligible area. - Somewhat tighter ratios. USDA's baseline debt-to-income caps run a bit tighter than FHA's. Both programs can stretch further with automated approval and compensating factors, but USDA's automated system is generally less generous with a thin file, so it's less likely to auto-approve one. None of that makes USDA a bad loan. It narrows who fits. Confirm the current income limits, area eligibility, and program requirements for your location, since they change and vary by market.