USDA Housing
Loan Program
What is a USDA Loan?
USDA mortgage loans are federal programs offered through the United States Department
of Agriculture promoting development in rural areas and offering 100% financing
opportunities for those who qualify. The USDA currently offers two types of loans.
USDA Direct Loans
Loans directly funded by the Government and available for low and very low-income
households. Mortgage payments are based on the household's adjusted income. These
loans are commonly referred to as Section 502 Direct Loans.
Eligibility: Applicants for direct loans
must have "very low" or "low" incomes, between 50% and 80% of the area median income.
Families must be without adequate housing and payment subsidy is available to applicants
to enhance repayment ability. Applicants must be unable to obtain credit elsewhere,
yet have reasonable credit histories.
USDA Guaranteed Loans
Loans made by a conventional mortgage lender, but guaranteed by the USDA for low
to moderate income individuals or households in rural areas.
Eligibility: Applicants for loans may have
an income of up to 115% of the area median income. Families must be without adequate
housing. Applicants must have reasonable credit histories.
* All information provided by the United States Department
of Agriculture & Rural Development.