A USDA / Rural Housing loan is a zero down payment loan built for rural parts of the country. In the Washington DC Metro Area, no county that touches the city would be eligible for this type of loan. However as close to DC as parts of Frederick County, or parts of Charles County, would work with a Rural Housing loan.
A Rural Housing loan typically has better loan terms to FHA financing and would be an alternative to FHA. If you were considering FHA financing and want to borrow in a rural area, the Rural Housing loan may be right for you.
Like FHA, the Rural Housing loan has an upfront mortgage insurance premium which you must finance into the loan amount. But it’s 1% instead of 1.75%. Also the annual mortgage insurance cost is .35% compared to FHA’s 1.15%. So compared to FHA you will save annually .8%. On a $300,000 sales price this is about $2,400 in savings per year.