What is the USDA loan income limit in Alabama?

In most Alabama counties the USDA Guaranteed Loan moderate-income limit is $122,800 for a 1-4 person household and $162,100 for a 5-8 person household, from the FY 2026 USDA table effective 07/13/2026. Higher-cost metro counties can have higher limits, so confirm the exact county row in USDA's income-limit PDF.

What is the USDA Section 502 Direct loan income limit in Alabama?

The Direct loan uses lower income limits than the Guaranteed program on this page. Section 502 Direct is reserved for low-income (at or below 80% of area median income) and very-low-income (at or below 50% of AMI) Alabama households, versus the moderate-income 115%-of-AMI ceiling that produces the $122,800 / $162,100 Guaranteed figures. USDA funds the Direct loan itself and can add a payment-assistance subsidy. Look up the exact Alabama county Direct income limit on USDA's eligibility portal under "Single Family Housing Direct."

Which areas of Alabama are USDA eligible?

Alabama's Black Belt and the timber and farm counties beyond its three largest metros are predominantly USDA-eligible rural territory. The largest urbanized cities — Birmingham, Montgomery and Mobile — and their immediate suburbs are excluded from the USDA Section 502 Guaranteed Loan eligible-area map, while the surrounding smaller communities generally remain eligible. Always confirm a specific address, because boundaries can run mid-street.

Is the USDA income limit the most I can borrow in Alabama?

No. The income limit only screens whether your household is eligible for the program. The loan amount is set separately by a USDA-approved lender using repayment income and the 29% PITI / 41% total-debt ratio guidelines; USDA sets no maximum loan amount.

Do you need a down payment for a USDA loan in Alabama?

No. The USDA Section 502 Guaranteed Loan finances 100% of the appraised value with no down payment, making it one of the only true zero-down mortgages available to Alabama buyers who meet the eligible-area and income tests. A 1.00% upfront guarantee fee can be rolled into the loan and a 0.35% annual fee is spread across the monthly payment, so out-of-pocket cash at closing can be limited to a deposit and closing costs.

Is Pell City USDA eligible?

On 2026-07-30, the point sampled inside Pell City (St. Clair County) fell outside USDA's published ineligible-area layer. That dated sample indicates USDA-eligible ground at that location even though the community commutes to Birmingham. Pell City's Census internal point returned outside USDA's ineligible area. USDA still decides eligibility address by address, so run the exact street address before writing an offer.

Is Birmingham USDA eligible?

No. Birmingham itself is an excluded urbanized core: every point sampled inside the city on 2026-07-30 fell inside USDA's ineligible-area layer. The USDA-eligible ground near Birmingham starts in the commuter belt — Pell City, Chelsea, Calera and Montevallo, Springville and Warrior all returned at least partly outside the ineligible area on the same sample. Boundaries can run mid-street, so confirm the specific address.

USDA by state

USDA loan income limits and eligible areas in Alabama

Alabama USDA Section 502 Guaranteed Loan income limits, the eligible-area context for its rural communities, and the official USDA sources behind both — then run the live address and income precheck.

Income limits verified 2026-07-18

Source review by Rural Home Check; last reviewed 2026-07-30

Open live precheck

Alabama income limit

In most Alabama counties the USDA Guaranteed Loan moderate-income limit is $122,800 for a 1-4 person household and $162,100 for a 5-8 person household (FY 2026 USDA table, PN 657, effective 07/13/2026).

Eligible areas in Alabama

Alabama's Black Belt and the timber and farm counties beyond its three largest metros are predominantly USDA-eligible rural territory. The urbanized cores of Birmingham, Montgomery and Mobile are excluded from the USDA map; their surrounding rural communities generally remain eligible.

USDA loan basics

Why buyers choose a USDA loan in Alabama

USDA generally defines an eligible rural area as one with a population of 35,000 or less, and for a home inside that map the Section 502 Guaranteed Loan finances 100% of the appraised value with no down payment — the two features that pull Alabama buyers toward USDA over FHA or conventional financing (USDA program facts verified 2026-06-26).

$0 down payment

The Section 502 Guaranteed Loan funds 100% of the appraised value, so qualified Alabama buyers bring no down payment. A 1.00% upfront guarantee fee is financeable and a 0.35% annual fee is built into the monthly payment.

Population 35,000 or less

An area qualifies as USDA “rural” when its population is 35,000 or less and it is rural in character — which is why most of Alabama outside Birmingham and the other large metros stays on the eligible-area map.

Income up to 115% of AMI

The program serves low- and moderate-income households — generally up to 115% of the area median income for the Alabama county, which is how USDA derives the $122,800 / $162,100 limits above.

Direct vs. Guaranteed

Section 502 Direct vs. Guaranteed loan income limits in Alabama

USDA runs two different Section 502 home-loan programs with two different income limits: the Guaranteed loan caps household income at 115% of the Alabama county area median income (the $122,800 / $162,100 figures on this page), while the Direct loan is far tighter — reserved for low-income (at or below 80% of AMI) and very-low-income (at or below 50% of AMI) households. This precheck and every income figure above cover the Guaranteed program; the Direct program uses its own, lower county limits (USDA program facts verified 2026-07-15).

Section 502 Guaranteed — up to 115% of AMI

A USDA-approved private lender funds the loan and USDA guarantees it. Moderate-income Alabama households up to 115% of the county AMI qualify, which is how USDA derives the $122,800 (1-4) / $162,100 (5-8) limits this page tracks. No down payment; a 1.00% upfront and 0.35% annual guarantee fee apply.

Section 502 Direct — very-low (≤50%) / low (≤80%) of AMI

USDA funds the loan directly and can add a payment-assistance subsidy that lowers the effective interest rate for the lowest-income Alabama buyers. Because the income ceiling is 50-80% of county AMI rather than 115%, the Direct income limits are lower than the figures on this page — look up the exact Alabama county Direct limit on USDA's eligibility portal (choose “Single Family Housing Direct”).

USDA Section 502 Direct program Look up Alabama Direct income limits

Eligible-area examples

Representative USDA-eligible-area communities in Alabama

In Alabama, small cities well under USDA's 35,000-person rural-area population ceiling and outside Birmingham, Montgomery and Mobile generally sit inside the USDA Section 502 eligible-area map — Selma, Demopolis, Fort Payne, Andalusia and Eufaula are representative examples, each a rural Alabama city under 35,000 residents at the 2020 Census. USDA sets eligibility address by address, so confirm the exact street address in the precheck.

These name the kind of eligible-area community, not a determination for any single address: USDA boundaries can run mid-street even inside a generally eligible town, and the excluded metros — Birmingham, Montgomery and Mobile — and their immediate suburbs stay off the map.

Boundary sample

Where the USDA line actually falls around Birmingham

On 2026-07-30 we queried USDA's published ineligible-area map layer — the same layer the precheck on this site uses — at 17 separate points across the Birmingham commuter belt. 6 of the 17 points fell outside USDA's ineligible area — but none of them were inside Birmingham itself. The USDA-eligible ground starts in the surrounding towns, and in 0 of them the line runs through the town itself.

Community	County	Points outside the ineligible area
Birmingham and inner suburbs	Jefferson and Shelby counties	0 of 5Last verified: 2026-07-30. The Census internal points for Birmingham, Homewood, Mountain Brook, Vestavia Hills and Hoover all returned inside USDA's ineligible area.
Bessemer, Center Point and Gardendale	Jefferson County	0 of 3The Census internal point for each community returned inside the Birmingham-area exclusion.
Trussville, Leeds and Moody	Jefferson, Shelby and St. Clair counties	0 of 3The Census internal point for each eastern commuter community returned inside the ineligible area.
Pell City	St. Clair County	1 of 1Pell City's Census internal point returned outside USDA's ineligible area.
Chelsea, Calera and Montevallo	Shelby and Chilton counties	3 of 3The Census internal point for each southern commuter community returned outside the ineligible area.
Springville and Warrior	St. Clair, Jefferson and Blount counties	2 of 2Both northern-edge Census internal points returned outside the ineligible area.

This is a dated reading of USDA's own layer (effective 2023-07-25) at a handful of points, not a determination for any address — which is exactly why the split counts matter. USDA and your lender make the final call, so enter the full street address in the precheck above.

Deep dive

A USDA Guaranteed Loan in Alabama turns on two separate USDA tests: whether the property sits in a USDA-eligible rural area, and whether household income is within the county income limit. Both must hold before a lender underwrites the file.

Alabama income limits by household size

USDA HB-1-3555 Appendix 5 sets the moderate-income limit per county and household-size band. Across most Alabama counties the floor is $122,800 (1-4 people) and $162,100 (5-8 people). For households above eight, USDA adds 8% of the four-person limit per additional person. The figure is adjusted annual household income after USDA's allowable deductions, not gross pay.

Alabama high-cost county exceptions

Some Alabama metro counties carry limits above the floor. For example, Huntsville, AL MSA is $132,850 (1-4) / $175,400 (5-8). Confirm the exact county row in USDA's official income-limit PDF.

Checking an Alabama address

USDA eligibility is address-level, not ZIP-level: one ZIP can straddle eligible and ineligible ground, and boundaries often run mid-street near Birmingham and other urbanized edges. Enter a complete Alabama street address in the live precheck to geocode the point and test it against USDA Rural Development's ineligible-area layer.

After the precheck

Save the Alabama address, county, household size, income, and check date. A USDA-approved lender and the Alabama USDA Rural Development state office confirm the official county row and final eligibility. Income eligibility is not a loan amount — the lender sets that with the 29% PITI / 41% total-debt ratios.

Common questions

USDA loans in Alabama — answers to the questions buyers ask

What is the USDA loan income limit in Alabama?: In most Alabama counties the USDA Guaranteed Loan moderate-income limit is $122,800 for a 1-4 person household and $162,100 for a 5-8 person household, from the FY 2026 USDA table effective 07/13/2026. Higher-cost metro counties can have higher limits, so confirm the exact county row in USDA's income-limit PDF.
What is the USDA Section 502 Direct loan income limit in Alabama?: The Direct loan uses lower income limits than the Guaranteed program on this page. Section 502 Direct is reserved for low-income (at or below 80% of area median income) and very-low-income (at or below 50% of AMI) Alabama households, versus the moderate-income 115%-of-AMI ceiling that produces the $122,800 / $162,100 Guaranteed figures. USDA funds the Direct loan itself and can add a payment-assistance subsidy. Look up the exact Alabama county Direct income limit on USDA's eligibility portal under "Single Family Housing Direct."
Which areas of Alabama are USDA eligible?: Alabama's Black Belt and the timber and farm counties beyond its three largest metros are predominantly USDA-eligible rural territory. The largest urbanized cities — Birmingham, Montgomery and Mobile — and their immediate suburbs are excluded from the USDA Section 502 Guaranteed Loan eligible-area map, while the surrounding smaller communities generally remain eligible. Always confirm a specific address, because boundaries can run mid-street.
Is the USDA income limit the most I can borrow in Alabama?: No. The income limit only screens whether your household is eligible for the program. The loan amount is set separately by a USDA-approved lender using repayment income and the 29% PITI / 41% total-debt ratio guidelines; USDA sets no maximum loan amount.
Do you need a down payment for a USDA loan in Alabama?: No. The USDA Section 502 Guaranteed Loan finances 100% of the appraised value with no down payment, making it one of the only true zero-down mortgages available to Alabama buyers who meet the eligible-area and income tests. A 1.00% upfront guarantee fee can be rolled into the loan and a 0.35% annual fee is spread across the monthly payment, so out-of-pocket cash at closing can be limited to a deposit and closing costs.
Is a specific Alabama town or suburb USDA eligible?: USDA eligibility is decided address by address, but as a rule the small Alabama cities well under USDA's 35,000-person rural-area population ceiling and outside Birmingham, Montgomery and Mobile sit inside the USDA Section 502 eligible-area map — Selma, Demopolis, Fort Payne, Andalusia and Eufaula are representative examples (each is a rural Alabama city under 35,000 residents at the 2020 Census). A ZIP or town name is only a starting point because boundaries can run mid-street, so enter the exact street address in the precheck to confirm.
Is Pell City USDA eligible?: On 2026-07-30, the point sampled inside Pell City (St. Clair County) fell outside USDA's published ineligible-area layer. That dated sample indicates USDA-eligible ground at that location even though the community commutes to Birmingham. Pell City's Census internal point returned outside USDA's ineligible area. USDA still decides eligibility address by address, so run the exact street address before writing an offer.
Is Birmingham USDA eligible?: No. Birmingham itself is an excluded urbanized core: every point sampled inside the city on 2026-07-30 fell inside USDA's ineligible-area layer. The USDA-eligible ground near Birmingham starts in the commuter belt — Pell City, Chelsea, Calera and Montevallo, Springville and Warrior all returned at least partly outside the ineligible area on the same sample. Boundaries can run mid-street, so confirm the specific address.

Primary sources

Verified USDA sources for Alabama

USDA Single Family Housing income limits (HB-1-3555 Appendix 5, FY 2026 PN 657) — AlabamaDate retrieved: 2026-07-18
USDA Rural Development Eligibility portal (property area)Date retrieved: 2026-06-26
USDA Eligibility MapServer ineligible-area layer — Birmingham boundary sampleDate retrieved: 2026-07-30
USDA Rural Development state offices (find the Alabama office)Date retrieved: 2026-06-26
U.S. Census Bureau QuickFacts (2020 Census place populations)Date retrieved: 2026-07-12
U.S. Census Bureau TIGERweb — 2025 Alabama incorporated-place internal pointsDate retrieved: 2026-07-30
USDA Single Family Housing Guaranteed Loan ProgramDate retrieved: 2026-06-26
USDA Single Family Housing Direct Home Loans (Section 502 Direct)Date retrieved: 2026-07-15

Related checks

Pair the Alabama income figures with the live address precheck and the national income-limit reference, then compare neighboring states.

USDA income limits by state and county Check a property address USDA income eligibility map USDA loans in Alaska USDA loans in Arizona All states

Sources

USDA area layerreadyVerified 2026-07-18 Census geocoderaddress inputVerified 2026-07-18 USDA income limitsFY 2026 snapshotUSDA FY 2026 income limits (effective 07/13/2026, PN 657); Verified 2026-07-18

This is an independent planning aid, not a USDA determination. USDA Rural Development indicates whether an address sits in an eligible area as of the check date; USDA and a USDA-approved lender make the final property and income eligibility decision in Alabama.