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Program: USDA Single Family Housing Direct Home Loans

Detail Verified 8/6/2018 - Last Updated 1/22/2018

Program Overview

Also known as the Section 502 Direct Loan Program, this program provides Single Family Housing loans in rural areas to eligible moderate, low, and very low-income applicants who are unable to obtain credit elsewhere. Under this program, low and very low income applicants may obtain 100% United States Department of Agriculture (USDA) direct financing to purchase and/or repair a home. Payment assistance is available. The amount of United States Department of Agriculture (USDA) subsidy varies based on an annual review of household income. The loan may be to purchase and/or repair existing housing, purchase a building site and construct a dwelling, purchase a newly constructed dwelling, or new manufactured housing. These homes must be owned and occupied by the borrower and be in a rural area.

Who is Eligible for this Program?

Household income cannot exceed an adjusted income limit based on household size. Additionally, you must have a satisfactory credit history, reliable and dependable income, and be able to show repayment ability including the loan payments, real estate taxes, homeowner’s insurance and current debt obligations.

You must be a U.S. citizen or legally admitted U.S. resident 18 years of age or older and able to enter into a binding contract. Borrowers must be without decent, safe, and sanitary housing and unable to obtain a loan from other resources on terms and conditions that they can reasonably be expected to meet.

See USDA Income Limits calculator: http://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do

The loan may be used to purchase and/or repair existing housing, purchase a building site and construct a dwelling, purchase a newly constructed dwelling or purchase new manufactured housing.

Is this program for first time buyers only?: No

Property Eligibility Requirements

Eligible properties must be in a rural area with a population not in excess of 35,000 that is not contained in a metropolitan statistical area and is in an eligible location. http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

Maximum loan amounts:
Clackamas County $358,800
Multnomah County $358,800
Washington County $358,800

Benefit Details

SECTION 502 DIRECT LOANS:
Under this program, low and very low income applicants may obtain 100% United States Department of Agriculture (USDA) direct financing to purchase and/or repair a home. Payment assistance is available. The amount of United States Department of Agriculture (USDA) subsidy varies based on an annual review of household income. The loan may be to purchase and/or repair existing housing, purchase a building site and construct a dwelling, purchase a newly constructed dwelling, or new manufactured housing.

SECTION 502 DIRECT LOANS WITH SELF HELP TECHNICAL ASSISTANCE:
Under this program, low and very low income applicants provide a substantial portion of the labor involved in building their own homes. This “sweat equity” contribution reduces the total cost of purchasing a home. Nonprofit organizations, funded through a United States Department of Agriculture (USDA) grant program, help the families become successful homeowners by providing technical assistance including homeownership education, loan packaging, and construction supervision. United States Department of Agriculture (USDA) provides financing to the individual homeowners through the 502 subsidized loan program.

GOVERNMENT OWNED HOMES AND ASSUMPTIONS OF EXISTING 502 DIRECT LOANS:
Priority is given to qualified low and very low income applicants to purchase government owned homes or purchase existing homes financed through the 502 direct loan program. United States Department of Agriculture (USDA) may also provide financing for repairs and closing costs in conjunction with these types of purchases. This financing can be up to 100% of the market value with no down payment.

Benefit:

Loan Term: 33-38 years

Homebuyer Counseling / Education Required: Yes

Owner Occupancy Required: Yes

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