• USDA Mortgage Loans

    Section 502 loans are primarily used to help low-income individuals or households
    purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate
    a home, or to purchase and prepare sites, including providing water and sewage facilities.

    Eligibility: Applicants for loans may have an income of up to 115% of the median income
    for the area. Area income limits for this program are here.   Families must be without
    adequate housing, but be able to afford the mortgage payments, including taxes and
    insurance.  In addition, applicants must have reasonable credit histories.

    Terms: Loans are for 30 years.  The promissory note interest rate is set by the lender.

    There is no required down payment. The lender must also determine repayment feasibility,
    using ratios of repayment (gross) income to PITI and to total family debt.

    Standards: Under the Section 502 program, housing must be modest in size, design, and cost.
    Houses constructed, purchased, or rehabilitated must meet the voluntary national model
    building code adopted by the state and HCFP thermal and site standards. New Manufactured
    housing must be permanently installed and meet the HUD Manufactured Housing Construction
    and Safety Standards and HCFP thermal and site standards.  Existing manufactured housing
    will not be guaranteed unless it is already financed with an HCFP direct or guaranteed loan or
    it is Real Estate Owned (REO) formerly secured by an HCFP direct or guaranteed loan.

    Approval: Rural Development officials have the authority to approve most Section 502 loan
    guarantee requests.

    USDA Mortgage Loans