Well, there are exceptions to most rules, and a USDA loan is one such exception. The U.S. Dept. of Agriculture backs loans in certain geographic areas that it has mapped and defined as "rural" locations. Interestingly, many of these locations are just minutes away from downtown Austin in the communities of Hutto, Pflugerville, Manor, Leander, Round Rock and other parts of Austin as well.
There are many advantages for a USDA loan, including lower interest rates, lower qualification requirements, up to 102% of the loan to home value (LTV), and no required monthly PMI insurance payment.
To qualify for a USDA backed loan, first of all, the home has to be in a USDA mapped area. The lender also has to be a certified USDA approved lender. There are other qualifications--best discussed with a knowledgeable USDA lender. Call me and I will give you the names of my recommended lenders to talk about your specific needs.