The mission of this USDA program is to “assist low to moderate income rural homebuyers achieve their dream of homeownership!”

Partnering with local lenders, these USDA loans provide 100% financing opportunities in many rural areas across the country.


  • 100% financing
  • No down payment required
  • Flexible credit guidelines
  • No maximum purchase price
  • Eligible repairs and improvements may be included in the loan
  • Applicants can use the approved lender of their choice
  • Not limited to first-time homebuyers


  • Applicants must purchase a home within the eligible rural areas
  • Household income must not exceed the established limits for the area
  • Qualifying ratios are 29% for housing costs and 41% for total debt


Section 502 Loans

  • Purpose: 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: Applications for loans may have an income of up to 115% of the median income for the area. 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.

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